Following an investigation, Instacart announced Monday that it’s ending a program that resulted in different shoppers being shown different prices for groceries on its platform.
The investigation found that Instacart’s algorithmic pricing experiments could result in price differences as high as 23 percent for certain products and could cost families more than $1,200 a year at checkout.
Consumer Reports, a testing and consumer advocacy organization, the Groundworks Collaborative, an economic think tank, and a More Perfect Union, a news organization that focuses on labor issues, economic policy, and corporate accountability, conducted the investigation.
“We welcome Instacart’s decision to reverse course and end its secret, AI-driven pricing experiments on unsuspecting shoppers,” Phil Radford, president and CEO of Consumer Reports, said in a statement. “At a time when everyday Americans are struggling with high prices, it is particularly egregious to see corporations secretly conducting individual experiments to charge different prices for the same products to get as much out of peoples’ pockets as possible.”
Radford said while it’s encouraging to see Instacart end this practice, Consumer Reports urges policymakers across the country to take a closer look at these types of AI-pricing experiments on consumers.”
Following the publication of the joint investigation, U.S. Senator Ruben Gallego, D-Ariz., announced the introduction of the “One Fair Price Act,” which would prevent companies from using consumers’ personal data to set individualized prices.
In addition, in Pennsylvania, a state Senator Lindsey M. Williams, D-Allegheny, referred to the investigation in announcing plans to introduce similar legislation that would prohibit “surveillance pricing,” the use of personal data or demographic information, shopping history, and buyer behavior to set prices.
Twelve members of Congress have sent formal letters to Instacart and the Federal Trade Commission, which regulates U.S. grocery stores.
The ranking member of the House Committee on Agriculture, U.S. Representative Angie Craig, D-Minn., sent a letter to Instacart, referring to the investigation’s findings and requesting answers from the company on its pricing practices by mid-January.
U.S. Senate Minority Leader Chuck Schumer, D-NY, also sent a letter to the FTC, requesting that the agency investigate the company. A group of four Democratic House members, known as the “Monopoly Busters Caucus,” also wrote to the FTC.
Seven senior Democratic senators, led by Amy Klobuchar and Cory Booker, have called on the FTC to investigate Instacart’s pricing strategies.
The FTC is investigating Instacart use of AI-driven pricing tools, according to Reuters.
