According to Reuters, Instacart is currently facing scrutiny from the FTC, which has issued a civil investigative demand regarding its AI-driven pricing tool, Eversight. Essentially, the agency is looking into why some customers are paying significantly more for organic granola than others.
This concern arose after a study indicated that shoppers encounter varying prices for the same groceries from the same stores, with differences reaching up to 23% in some cases. Instacart claims these price tests are randomized and not linked to an algorithm that adjusts prices based on a customer’s browsing history. However, for consumers already stressed about rising food costs, this distinction may not hold much weight.
Dynamic pricing isn’t a new concept and isn’t always seen as unethical. Harvard Business School notes that it allows digital platforms to remain competitive. Airlines, hotels, and services like Uber frequently use this strategy, arguing that it helps balance supply and demand, optimize profits, and create mutually beneficial scenarios.
However, there’s a notable difference between paying surge pricing for a ride home from the bar and facing higher prices for groceries, since food is a necessity. While the FTC’s investigation doesn’t imply any wrongdoing, it’s not surprising that the agency—having previously looked into similar data-driven pricing tactics—wants to know more. In a time when many people are feeling the financial pinch, AI-related price testing for essential groceries was bound to draw attention.
