Instacart investigation reignites policy discussions on retailers’ pricing tactics

Nearly a year after new FTC chair Andrew Ferguson halted public comment on surveillance pricing, the topic has resurfaced in Washington amid a new investigation into Instacart’s pricing tactics.

Groundwork Collaborative, Consumer Reports, and More Perfect Union released a new report this week claiming Instacart’s AI pricing tool offers consumers individualized prices even when simultaneously adding the same items from the same grocery stores to their carts.

The investigation utilized 437 shoppers across four cities at two Target and three Safeway stores. Of the grocery items added to cart, 74% had differing price points from shopper to shopper, with up to five different prices per item. A Washington, DC, Safeway, for example, offered a dozen Lucerne eggs for ​​$3.99, $4.28, $4.59, $4.69, and $4.79. The average differential between high and low prices was 13%, but ranged up to 23%—which was the case for products like Skippy Creamy Peanut Butter and Wheat Thins at a Seattle Safeway.

Shopping basket totals varied by about 7%, reaching as high as 8.4%, which the report estimated could amount to $1,200 more per year for shoppers, based on an average four-person household’s annual grocery spend.

Instacart said in a blog post Tuesday that 10 of its retail partners use its Eversight AI technology to conduct “short-term, randomized tests” to “understand category-level price sensitivity,” but claimed they don’t use “personal, demographic, or user-level behavioral data.”

Retailers’ use of surveillance pricing made headlines in January, when the FTC released findings and issued a request for public comment, with then-chair Lina Khan stating retailers “frequently use” consumers’ personal data to charge individualized prices. Ferguson closed the request for public comment, set to run until April 17, just a week later.

In tandem with the report’s release, Senator Ruben Gallego this week introduced the One Fair Price Act, which would block companies from setting different prices for consumers based on personal data and require them to disclose price differences instituted for other reasons.

“I’m trying to level the playing field to make sure that you as a consumer are getting a fair price that is decided by true capitalism, and not the exploitative things that these corporations are trying to do,” Gallego said in a call with journalists this week, noting he believes the bill could have bipartisan support.

The bill would build on state-level efforts to crack down on surveillance pricing, like a New York law that went into effect last month requiring companies to disclose the practice to consumers.