Instacart $CART ( ▼ 1.53% ) fell more than 7% in premarket trading after Reuters reported that the Federal Trade Commission has opened an investigation into the company’s AI-powered pricing software. The probe centers on whether Instacart’s technology results in consumers paying different prices for the same groceries, a sensitive issue at a time when regulators are increasingly wary of algorithmic pricing.
Why Regulators Are Paying Attention
According to Reuters, the FTC has sent Instacart a civil investigative demand seeking information about Eversight, an AI pricing platform Instacart acquired in 2022 for $59 million. Eversight allows retailers to test different prices and promotions across products and categories, a tool Instacart has pitched as a way to boost revenue by 1–3% and lift margins by up to 5%.
The scrutiny follows a study published last week that found identical grocery orders at the same stores could vary widely in price across users, with differences reaching as much as 23% per item. That kind of dispersion has raised red flags among regulators already concerned that AI tools could quietly enable price discrimination.
Instacart Pushes Back
Instacart has denied wrongdoing, saying its pricing practices have been “mischaracterized.” The company told TechCrunch that retailers, not Instacart, ultimately control prices on the platform and that Eversight’s tests are randomized rather than tailored to individual users. In a statement cited by Reuters, the FTC declined to comment on the investigation itself but said it was “disturbed by what we have read in the press” about the company’s alleged practices.
The timing is not great for Instacart. As growth in online grocery slows and competition from Amazon intensifies, the company has been leaning heavily on AI tools to improve profitability in a notoriously low-margin business. That strategy may still pay off long term, but in the near term, the FTC’s interest adds a fresh layer of regulatory risk that investors clearly were not eager to price in this morning.