Instacart Abruptly Scraps AI Price Experiments After Consumer Backlash

Following a week of intense regulatory pressure and public outrage, Instacart announced today that it is permanently halting its controversial "item price tests." The decision comes just days after reports revealed the grocery delivery giant was using artificial intelligence to show different customers different prices for identical items—sometimes at the exact same moment.


The reversal marks a significant victory for consumer advocacy groups and signals a potential turning point in how e-commerce platforms are permitted to use algorithms to test consumer "willingness to pay."

The "Pricing Roulette"
The controversy erupted earlier this month following a joint investigation by Consumer Reports, Groundwork Collaborative, and More Perfect Union. The groups conducted a synchronized shopping experiment which found that Instacart’s algorithms were generating inexplicable price discrepancies.


The Findings: In one instance, shoppers at the same Safeway location in Seattle saw the price of Wheat Thins vary by as much as 23% depending on who was looking at the app.

The Impact: Researchers estimated that for a family of four, these "randomized" price hikes could amount to an "Instacart tax" of nearly $1,200 annually.

The Mechanism: The variances were driven by Eversight, an AI pricing engine Instacart acquired in 2022. The tool allowed retailers to run A/B tests on live customers to gauge how price changes affected buying behavior.


"That's Not Okay"
In a blog post published Monday, Instacart adopted a contrite tone, acknowledging that while A/B testing is standard in tech, it had crossed a line in the grocery aisle.

"At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart," the company stated. "That's not okay – especially for a company built on trust, transparency, and affordability."

The company clarified that effective immediately, it will no longer support any item price testing services for its retail partners. However, it maintained that these tests were never "surveillance pricing" (based on personal data like income) nor "dynamic pricing" (based on real-time supply and demand), but rather randomized experiments.


The FTC Steps In
The swift policy change was likely accelerated by the looming shadow of the Federal Trade Commission (FTC). Last week, Reuters reported that the FTC had opened a probe into the practice, with agency officials stating they were "disturbed" by the reports of pricing discrepancies.

This scrutiny compounds a difficult month for Instacart’s legal team. Just last week, the company agreed to pay $60 million to settle separate FTC allegations regarding deceptive "hidden fees" and misleading delivery promises.

"This is a massive win for consumers," said Lindsay Owens, executive director of Groundwork Collaborative. "Companies should not be treating grocery prices like a casino game. When the curtain was pulled back, Instacart had no choice but to close the lab."