Instacart's AI Pricing Strategy Raises Ethical Concerns

U.S. Senator Charles Schumer is calling on the Federal Trade Commission to investigate Instacart's use of artificial intelligence for pricing, following a report that revealed the grocery delivery app charges some customers up to 23% more than others for the same items.

This concern arises from a massive investigation by Consumer Reports and Groundwork Collaborative, which indicated that a family of four could see their annual grocery spending increase by $1,200 due to these fluctuating prices.

Schumer criticized Instacart's leadership for prioritizing profits over consumer fairness, stating that the practice is akin to price gouging. In response, an Instacart representative defended the company's pricing practices, asserting that the pricing differences are displayed on the app and that these practices are part of A/B testing used by retailers for years.

The representative emphasized that prices do not change in real time and that personal or demographic data is not used to set prices on Instacart.