① US grocery shopping app Instacart is under investigation by the US Federal Trade Commission (FTC) due to controversy over its AI pricing tool, and its stock price plummeted by more than 10% in after-hours trading; ② A survey shows that at the same time, in the same store, and for the same product, different consumers can see prices that differ by up to 23%, raising questions about "algorithmic price gouging".
Instacart, the US grocery shopping app that frequently appears in various AI agent demonstrations, is running into trouble because its AI pricing tool has resulted in "different prices for the same item".
As of press time, Instacart's US stock price had fallen by more than 10% in after-hours trading on Wednesday , and remained down 7% in overnight trading.
According to multiple sources, the U.S. Federal Trade Commission is investigating Eversight, Instacart's AI-powered retail pricing tool . The agency has issued a civil inquiry request to the company, seeking relevant information.
According to Instacart's website, its AI pricing tool, Eversight, allows retailers to conduct price tests to assess shoppers' reactions to higher or lower prices for different product categories . The company also states that retailers using "AI pricing" can see a 1%-3% increase in revenue .
As we all know, dynamic pricing is already the norm in many industries, such as airlines, hotels, and ride-hailing apps, but these optional consumptions are obviously quite different from buying essential food items.
The regulatory attention was drawn by a survey conducted by several non-profit organizations, involving 437 consumers who checked prices on the Instacart app in four different cities. The study showed that the average price difference for the same item purchased in the same store could reach 7% . In extreme cases, some shoppers found that the exact same item, in the exact same store, at the exact same time, was priced as much as 23% higher than what other shoppers saw .
In response to public criticism, Instacart stated that the company only provides AI tools, and the actual "pricing tests" are conducted by the retailers themselves . Furthermore, the tool is neither dynamic pricing nor surveillance pricing—prices on the app do not change in real time, nor are they based on user information and behavioral data; pricing tests are conducted entirely randomly.
The Federal Trade Commission said in a statement: "The Commission's long-standing policy is not to comment on any potential or ongoing investigations. But like many Americans, we are concerned about the pricing practices mentioned in media reports ."
Some members of Congress have also criticized the move. New York Democratic Senator Chuck Schumer wrote to regulators last Sunday stating that consumers have the right to know they are being placed in a pricing test, and that regulators should require this to be clearly displayed on screens .
This is not the first time that U.S. regulators have launched an investigation into "AI pricing" or "algorithmic pricing."
The U.S. Federal Trade Commission issued a warning to Mastercard last year. Credit Suisse, JPMorgan Chase Accenture Companies like McKinsey and others have sent letters requesting information about their algorithmic pricing tools. In a preliminary report in January, the committee stated that some tools use data such as past purchase records, location, and other information about online activity to help companies assess what consumers are willing to pay.
Amid growing public concern about inflation in the United States, the use of AI tools to "inflate prices" is expected to face increased regulatory scrutiny. In the November elections, the Democratic Party won a series of elections on the issue of inflation, forcing Trump to adjust his strategy and focus more on affordability.
(Article source: CLS)
