Instacart just hit the kill switch on its controversial AI pricing experiments. The grocery delivery platform announced it's immediately discontinuing its Eversight technology that allowed retailers to run dynamic pricing tests, effectively ending a practice that had triggered widespread backlash after researchers found shoppers were paying wildly different prices for the same items from the same store.
The decision came with a rare acknowledgment of failure from Instacart. In a Monday blog post, the company admitted that the pricing tests "missed the mark" and that the practice had left customers "questioning the prices they see on Instacart." The company framed its reversal as a matter of principle: "That's not okay - especially for a company built on trust, transparency, and affordability."
The timing here is significant. Just weeks ago, Consumer Reports released findings showing that Instacart's algorithmic pricing tools caused the same basket of groceries to cost wildly different amounts depending on which shopper was looking at it. The price swings hovered around 7%, which sounds small until you do the math - that translates to more than $1,000 in additional annual costs for some customers. It's the kind of headline that turns casual shoppers into angry customers.
The backlash was swift and bipartisan. Lawmakers who rarely agree on tech regulation suddenly found common ground criticizing Instacart for what felt like digital price discrimination at the grocery store checkout. Senator Elizabeth Warren and others took shots at the practice, framing it as exploitative during a time when families are genuinely struggling with inflation and food costs. That political heat combined with the FTC's scrutiny forced Instacart's hand.
The FTC angle here is particularly important for understanding the urgency. Last week, Reuters reported that the agency had sent a civil investigative demand to Instacart about its pricing practices - essentially a formal request for all documents and data related to how the company was experimenting with different prices for different customers. That's the FTC's version of showing up with a search warrant.
Then, just days later, Instacart faced another massive hit. The company was ordered to pay $60 million to settle FTC charges that it used deceptive tactics with its subscription service sign-ups and misleading "satisfaction guarantee" advertising. While Instacart denied wrongdoing in that settlement, the company acknowledged it had answered FTC questions about its AI pricing tools as part of the process. The optics were terrible - a company under investigation for deceptive practices while simultaneously running experiments that made customers pay different prices for the same product.
