Groups Urge Government Probe of Instacart's Individualized Pricing
Consumer Reports and other groups raised the stakes on an earlier claim that Instacart is using personal data to set grocery prices, unbeknownst to customers. On Tuesday, Consumer Reports and More Perfect Union called on the FTC and state attorneys general to investigate, presenting a petition with 40,000 signatures and charging Instacart with deceptive or unfair pricing practices in violation of the FTC Act.
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Meanwhile, on Thursday, the FTC said it arrived at a $60 million settlement with the online grocer after finding it engaged in deceptive practices that hiked customer fees. Instacart denied any wrongdoing.
Earlier this month, Consumer Reports and the two other groups unveiled a study they said showed Instacart is using data about consumers to charge different prices for the same item (see 2512090044). Almost 75% of grocery items were offered at multiple price points, the report said. Basket totals for study participants varied by an average of 7% for the same groceries from the same stores at the same time. Another group, Groundwork Collaborative, also worked on the study.
Justin Brookman, director of marketplace policy at Consumer Reports, in a statement Tuesday, said, “At a time when everyday Americans are struggling with high prices, it is particularly egregious to see corporations secretly conducting individual experiments to see how much a person is willing to pay."
He added, "Companies must be transparent and upfront with people about pricing."
As part of Thursday's FTC settlement for deceptive practices, Instacart must refund $60 million to customers, the agency said. Instacart also is required to “cease its deceptive practices” under the FTC’s proposed order. The FTC said Instacart charged consumers delivery fees, though it advertised free deliveries. It also failed to tell consumers they were enrolled in programs though they only signed up for a free trial, the FTC said.
Instacart published a blog post Thursday denying the FTC's charges.
In an email to Privacy Daily, Instacart said it's "proud to offer a transparent, affordable, and consumer-friendly service ... in full compliance with the law and exceeding industry norms." In its statement to us, Instacart said it "flatly" denies "any allegations of wrongdoing by the Federal Trade Commission" in the deceptive practices incident.
It added, "we stand firmly behind the integrity and transparency of our programs.” The settlement lets us “move forward and remain focused on delivering value for our customers, shoppers, and retail and brand partners in the communities we serve.”