Instacart says it’s ending its AI-based price testing

Instacart is abandoning its price tests after facing huge backlash from customers.

The grocery delivery service announced Monday that it is ending its item price testing program following a investigation report which found that customers were being charged different prices for the same products, even when the items were ordered at the same time. As users have become more aware of pricing of encroaching surveillanceThe public backlash against Instacart was swift and attracted the attention of regulators.

The reaction was triggered by a report earlier this month by Consumer Reports, Groundwork Collaborative and More Perfect Union. The investigation found that Instacart charged some customers nearly 25% more than others for the same products purchased at the same stores. These price differences are reportedly linked to the company’s Eversight pricing tool, which Instacart describes as an “AI-powered pricing and promotions platform.”

The report presents the results of an experiment conducted in September, in which 437 shoppers across multiple cities added the same items to their Instacart carts from the same stores. On average, shoppers saw a 13% price difference for the same items, with gaps as high as 23%.

In a press release On Monday, Instacart said retailers would no longer be filtered through the Eversight tool.

“At a time when families are working extremely hard to get the most out of every dollar spent on groceries, these tests have raised concerns, leaving some people questioning the prices they see on Instacart,” the press release said. “This is not acceptable, especially for a company built on trust, transparency and affordability.”

Instacart claimed that the price differences were the result of experiments conducted in partnership with a small number of retailers and that prices were randomized rather than based on customer demographics or personal information.

“While these tests did not involve dynamic pricing or monitoring pricing – and were never based on supply or demand, personal data, demographics or individual purchasing behavior – we listened carefully to our customers’ feedback and understand that these tests did not meet their expectations,” the company said.

The move comes just days after some media outlets reported that the Federal Trade Commission had launched an investigation into Instacart’s pricing practices.

This also follows the company’s agreement to issue $60 million in reimbursements to settle separate FTC allegations that it engaged in deceptive marketing practices.

“Instacart misled consumers by advertising free delivery services, then charging consumers to deliver their groceries, and failing to disclose to consumers who signed up for a free trial that they would be automatically enrolled in its subscription program,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a press release.

An Instacart spokesperson told Gizmodo that the company has denied any allegations of wrongdoing, adding that it offers “simple marketing, transparent pricing and fees, clear terms, easy cancellation, and generous refund policies,” which the company says comply with the law and follow industry standards.