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Instacart said Monday that it would halt the use of an AI-powered tool that allowed retailers to charge customers different prices for identical items on the grocery delivery platform.
“Effective immediately, Instacart is ending all item price tests on our platform,” an Instacart spokesperson told CBS News in an email statement. “Retailers will no longer be able to use Eversight technology to run item price tests on Instacart.”
The announcement comes after a recent investigation by Consumer Reports and Groundwork Collaborative, an nonprofit advocacy group, found evidence that retailers such as Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market and Target were testing the AI pricing system.
The organizations based their findings on data gathered from more than 400 volunteers during online shopping sessions in September. During one test conducted for a Safeway in Seattle, the price for a box of Wheat Thins varied by as much as 23%.
“Once we pulled back the curtain on Instacart’s hidden pricing experiments, the company had no choice but to close the lab,” Groundwork Collaborative’s executive director Lindsay Owens said in a statement on Monday.
Retailers will continue to set their own prices on the delivery website, and they may still offer different prices at different brick-and-mortar locations, Instacart said Monday in a blog post.
Instacart acquired Eversight, an AI-enabled pricing platform, in 2022, and began offering pricing software to retail companies in 2023.
Instacart claims the AI pricing tests did not include customers’ personal, demographic, or user-level behavioral characteristics. The decision to end the use of its pricing tool was made in response to feedback from Instacart customers, a company spokesperson said Monday.
Reuters reported on Dec. 17 that the Federal Trade Commission was probing Instacart over its AI pricing tests. The FTC declined to comment on the report, but said in a statement that it was “disturbed by what we have read in the press about Instacart’s alleged pricing practices.”
The FTC did not immediately respond to a request for comment on Instacart shelving its AI pricing technology.
In a separate case last week, Instacart agreed to pay $60 million in customer refunds to settle federal allegations of deceptive practices after the FTC accused Instacart of falsely advertising free deliveries and not clearly disclosing service fees.
