Instacart Halts AI Pricing Experiments After Study And Lawmaker Backlash

(RTTNews) - Instacart (CART) said it has stopped allowing retailers to run artificial intelligence-based pricing tests on its platform after the practice drew criticism from consumer groups and U.S. lawmakers.

The company said retailers can no longer use its Eversight technology to experiment with prices, ending the program with immediate effect. Instacart acknowledged that tests conducted with a small number of retail partners led to different prices for the same item at the same store, which confused customers and undermined trust at a time when shoppers are under pressure from rising grocery costs.

Instacart bought Eversight for $59 million in 2022, saying the software would help retailers fine-tune pricing and surface better deals for customers.

Earlier this month, a study by Consumer Reports and others found that the tools caused the same basket of goods at one store to vary in price by about 7 percent, potentially adding more than $1,000 a year to some households' grocery bills. Instacart said retailers, not the platform, set item prices and denied that the system used personal or behavioral data.

The decision comes as scrutiny intensifies. Reuters reported last week that the Federal Trade Commission had issued a civil investigative demand over Instacart's pricing practices.

Separately, the company recently agreed to pay $60 million in refunds to settle FTC claims tied to its subscription sign-up process and advertising, while denying any wrongdoing and saying it had already provided information to regulators about its AI pricing tools.

CART currently trades at $45.04, or 0.04% lower on the NasdaqGS.