Instacart's AI Pricing Probed

The Federal Trade Commission (FTC) is investigating Instacart's AI-driven pricing tool, Eversight, amid concerns that it leads to price discrimination. The tool allows retailers to test different prices, potentially charging different customers varying amounts for the same items. A recent study indicated price discrepancies of up to 23% for identical groceries.

The FTC's investigation was prompted by reports of inconsistent pricing for the same goods on the platform. The probe aims to determine if Instacart's differential pricing constitutes an unfair or deceptive practice. This scrutiny arrives as new leadership at the FTC plans to reduce surveillance pricing studies.

Legislators and consumer advocacy groups have voiced concerns over algorithmic pricing. New York already enforces the Algorithmic Pricing Disclosure Act, mandating that companies using dynamic pricing disclose that prices are algorithmically determined. Similar algorithmic pricing bills have appeared in many states. Following the news of the investigation, Instacart's shares dropped.