FTC Probes Instacart AI Tool Over 23% Grocery Price Spikes

The Federal Trade Commission (FTC) has launched an investigation into Instacart’s AI-driven pricing tool, Eversight, following revelations that US shoppers faced grocery price differences of up to 23% for identical items. According to Reuters, the regulatory agency issued a civil investigative demand to the grocery delivery platform to determine why some consumers are paying significantly more than others for the exact same products.

Why the FTC Is Targeting Instacart’s AI Tool

The federal probe comes on the heels of a study showing that Instacart users frequently see vastly different prices for identical groceries from the same local stores. In some instances, price discrepancies reached as high as 23%. While Instacart maintains these variations are the result of randomized testing rather than targeted algorithms, the price gaps have raised red flags for regulators and frustrated consumers already struggling with high food costs.

The Debate Over Dynamic Pricing in Essential Goods

Variable pricing models are a staple of modern digital commerce. Major industries—including airlines, hotels, and ride-sharing platforms like Uber—rely on dynamic pricing to balance market supply and demand, optimize profit margins, and maintain competitiveness. Business experts often defend the practice as an efficient economic tool.

However, applying these algorithms to essential household goods triggers intense scrutiny. Unlike booking a flight or ordering a ride home, buying food is a necessity. This distinction explains why the FTC has expanded its scrutiny into data-driven pricing strategies across retail sectors, particularly when consumers are highly sensitive to inflation.

Instacart Clarifies Its Pricing Strategy

Instacart strongly denies accusations of unfair pricing practices, claiming that public reports have mischaracterized how its platform operates. A spokesperson for the company clarified that retail partners, not Instacart, maintain ultimate control over their pricing strategies, with the platform working to align online and in-store costs whenever possible.

Furthermore, the company insists that its Eversight tool does not engage in real-time dynamic or surveillance pricing. According to Instacart, prices do not fluctuate based on real-time supply and demand, nor does the platform track personal, demographic, or behavioral data to determine costs. Instead, the company describes the system as a randomized A/B testing framework, comparing it to traditional brick-and-mortar retail tactics used to evaluate pricing structures across different store locations.