Instacart is ending controversial price tests

Grocery delivery service Instacart will end its controversial price tests, it announced on Monday.

The move comes weeks after a Consumer Reports investigation claimed that Instacart's AI-enabled price experiments may be upping your grocery bill.

The investigation reported that the experiments priced the same products differently for different consumers, sometimes by as much as 23 percent. The price variations could result in a yearly difference of $1,200 in grocery spending, according to Consumer Reports. The investigation also found that Instacart acquired an AI company in 2022 called Eversight, and afterwards, Instacart began offering pricing software to retail companies to "optimize" prices.

Several lawmakers took action against individualized pricing this month. Democratic Sen. Ruben Gallego of Arizona introduced a bill to crack down on "surveillance" pricing, while Democratic Minnesota Rep. Angie Craig sent a letter to Instacart asking for answers. Democratic Senate Minority Leader Chuck Schumer of New York sent a different letter to the Federal Trade Commission (FTC). The latter two cite the Consumer Reports investigation.

Last week, Instacart denied that the experiments were dynamic pricing or surveillance pricing, instead stating that they were random A/B tests. (Dynamic pricing fluctuates based on demand, and surveillance pricing uses a consumer's characteristics and behavior to set individual prices.) It also denied Consumer Reports' claim that these tests cost a typical family $1,200 a year.

Today, Instacart announced that it is ending these price tests.

"We understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers," the blog post states.

"Effective immediately, Instacart is ending all item price tests on our platform. Retailers will no longer be able to use Eversight technology to run item price tests on Instacart."

The post explains that this means if two families are shopping for the same items at the same time at the same store location on Instacart, they will see the same price.

An Instacart spokesperson denied that these tests were dynamic or surveillance pricing in a statement sent to Mashable. "While these pricing tests were not dynamic pricing nor surveillance pricing, and were never based on personal, demographic, or user-level behavioral characteristics, we've listened carefully to customer feedback, and we understand these tests fell short of their expectations," the spokesperson said.

This announcement also comes days after the FTC announced that Instacart will pay $60 million to consumers as part of a settlement. FTC's lawsuit claimed that Instacart engaged in deceptive tactics like falsely advertising "free delivery" and failing to disclose the terms of its Instacart+ membership. Instacart denied the FTC's allegations.