Instacart’s AI pricing system has sparked a national debate on fairness in online grocery shopping, after revelations that identical items carried price tags varying by up to 23% for different customers at the same time.
Consumer Reports’ December 2025 investigation exposed how Instacart’s technology allowed retailers to charge disparate prices for the same products simultaneously. Researchers enlisted 437 volunteers to buy identical grocery baskets from chains like Kroger, Safeway, and Target. Results showed some orders differing by nearly $10, with potential annual costs rising by about $1,200 for regular household shoppers. The findings ignited concerns over hidden algorithmic experiments inflating everyday expenses.
FTC Probe Launched
On December 17, 2025, the Federal Trade Commission issued a civil investigative demand to Instacart, acting as an administrative subpoena for documents and testimony. Regulators focused on whether the company disclosed customers’ involvement in AI-driven pricing tests. This move followed reports of troubling practices, heightening federal oversight of dynamic pricing tools.
Eversight Acquisition Fuels Scrutiny
At the controversy’s core lies Eversight, an AI platform Instacart bought for $59 million in September 2022 to boost retailer tools. The system supported randomized A/B testing, showing varied “original” prices for discounts to different customer groups. Instacart’s materials touted 1-3% revenue gains and 2-5% margin boosts for partners. Patent filings mentioned segmenting users by personal and demographic data into pricing tiers, raising questions about transparency.
Political Pressure Mounts
Congressional Democrats amplified the outcry. Senate Minority Leader Chuck Schumer wrote to the FTC on December 14, 2025, labeling the practices AI-driven price gouging and citing the $1,200 yearly hit to families. He called for on-screen alerts during tests. Representative Robert Garcia and others sent separate inquiries demanding details on pricing strategies. The push mirrored widespread unease over grocery inflation squeezing household budgets.
Instacart’s stock dropped 7% in after-hours trading on December 17, 2025, post-announcement, and closed down over 1% the next day. Its market cap hovered at $11.8 billion by December 23. Concurrently, the FTC secured a $60 million settlement for unrelated deceptive billing: false “free delivery” claims, hidden service fees, and auto-enrollments in subscriptions without consent. Instacart must now secure explicit approval for such programs and end misrepresentations.
Company Response and Halt
Instacart pushed back, insisting retailers set prices and media mischaracterized operations. Only 10 U.S. retailers used Eversight for limited online tests, akin to in-store practices, with no dynamic or surveillance pricing, the company said. CEO Chris Rogers framed tests as ways to gauge preferences for sustainable reductions. On December 22, amid backlash, Instacart terminated all item-level testing. Now, simultaneous shoppers from the same store see identical prices, though retailers keep store-specific flexibility.
Wider Regulatory Wave
The case fits broader FTC efforts against AI pricing. In July 2024, orders went to eight “surveillance pricing” firms probing data-driven individualized rates. Agency guidance flags unjustified price discrimination as unfair. Parallel probes hit Amazon’s “Project Nessie” and RealPage’s rentals. States act too: California and New York passed laws; Minnesota, Colorado, and others propose disclosures like “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA” or bans on real-time shifts. Academic studies warn AI enables tacit collusion, with algorithms learning supra-competitive pricing.
Despite turbulence, Instacart thrived financially: Q3 2025 brought $0.51 per-share earnings, 10% revenue growth to $9.17 billion gross transaction value, and 14% order increase to 83.4 million. Cash flow hit $287 million, with a $1.5 billion buyback expansion. Competition stiffens from Amazon’s 30-minute delivery in 2,300 cities, DoorDash, and Uber Eats.
The saga signals shifting ground for grocery delivery. Ending tests safeguards trust in a cutthroat market, paving paths into ads and tech services. Yet it underscores stakes: regulators may mandate disclosures for AI prices on essentials, forcing industry balance between innovation and equity to avoid eroding consumer faith.
Sources:
“Instacart Shares Drop on Report FTC Probing Company’s AI Pricing Tool.” CNBC, December 17, 2025.
“Instacart’s AI Pricing May Be Inflating Your Grocery Bill.” Consumer Reports, December 21, 2025.
“Instacart to Pay $60 Million in Consumer Refunds to Settle FTC Lawsuit over Algorithmic Pricing Deception.” Federal Trade Commission Press Release, December 18, 2025.
“Leader Schumer Sounds Alarm on Instacart’s Use of AI to Price Gouge Customers.” U.S. Senate Minority Leader Press Release, December 13, 2025.
“Instacart Ends AI Pricing Tests Following FTC Probe and Consumer Backlash.” TechCrunch, December 22, 2025.
“Study Shows Instacart May Be Charging Some Shoppers 20% More for the Same Product.” TechCrunch, December 16, 2025.