Consumer advocate groups and private parties are advancing theories regarding harm caused by the use of artificial intelligence (AI) and data to determine pricing. In 2025, the Federal Trade Commission (FTC) released a pricing study identifying dynamic pricing as a means to generate higher profits for consumer-facing markets. As the end of 2025 approached, the FTC reportedly opened an investigation into Instacart’s use of such pricing, signaling a continued interest in the impact of dynamic pricing on consumers.
Retailers, property management, healthcare, restaurants, and other consumer-facing companies should monitor the investigation and consider the risk of using price optimization and dynamic pricing tools.
This case study 1) explains Instacart’s pricing tool, 2) considers what triggered the FTC’s investigation, 3) describes what is known about the investigation, 4) identifies Instacart’s public statements that may have contributed to the investigation, 5) discusses the legal theories, and 6) provides a peek into the future.
1) Overview of Eversight and Its Functionality
Instacart’s Eversight is an AI-powered pricing and promotions tool. Retailers and consumer packaged goods (CPG) brands optimize their pricing strategies by leveraging Eversight’s automated testing, price optimization using elasticity models, and real-time price experimentation. The platform allows users to run continuous price tests, generating millions of permutations to identify optimal price points, which are adjusted based on consumer demand data.
Instacart markets Eversight as an essential tool for grocers and CPGs seeking to maximizerevenue while offering price transparency and maintaining price parity. The system is aimed primarily at retailers and brands and is already in use by major companies.
The key selling points of Eversight include:
- Price Optimization: Tools to identify the right price point for products, based on elasticity models
- Testing & Experimentation: Continuous testing on shoppers to determine the most effective prices
- Visibility & Governance: Comprehensive reporting to ensure pricing strategies are aligned with company goals
Consumer advocates have raised concerns regarding the consumer-facing implications of these experiments, especially concerning price differentiation across consumers at the same store and time.
2) What Triggered the FTC Investigation
The FTC’s investigation into Instacart’s Eversight followed concerns over price discrimination and deceptive pricing practices. Groundwork Collaborative, Consumer Reports, and More Perfect Union’s report was a key trigger. The study involved 437 shoppers in four cities. The study found:
- Price Variation: Consumers shopping for the same items at the same store at the same time saw prices that varied by up to 23%.
- Total Basket Discrepancies: Shoppers purchasing the same items could pay up to 7% more, depending on when and how their purchases were made.
Instacart defended its practices, asserting that the tests were randomized and did not use personal data, demographics, or user behavior. The company also emphasized that the tests were designed to help retailers optimize pricing, not to engage in dynamic or “surveillance” pricing.
Nevertheless, consumer protection advocates and some lawmakers have voiced concerns that these practices may lead to confusion and deceptive pricing practices that harm consumers, especially if they were not aware they were being subjected to price experiments.
3) What We Know About the FTC Investigation
Reuters reported that the FTC issued a civil investigative demand (CID) to Instacart, seeking more information on how Eversight operates, specifically regarding its price experimentation features. The FTC has not formally filed a complaint, but the issuance of a CID signals the agency’s serious interest in scrutinizing the tool’s potential effects on consumer harm and competition.
The FTC’s interest aligns with its broader initiative to monitor algorithmic pricing practices and surveillance pricing—where prices are adjusted based on individual consumer behavior without adequate disclosure. Although Instacart has denied using personal data for price adjustments, the agency is likely investigating whether the tool facilitates unfair price discrimination or violates Section 5 of the FTC Act by misleading consumers.
4) What are the Antitrust and Consumer Protection Legal Risks
While the FTC has not yet brought formal charges, several legal risks are evident from the public facts.
A) Antitrust Risks:
- Sherman Act Section 1 (Price Fixing): If multiple retailers use Eversight and the platform inadvertently facilitates price coordination among competitors by sharing data or encouraging similar price strategies, it could raise concerns under Section 1 of the Sherman Act (price fixing or concerted action). However, Instacart asserts that it does not facilitate such coordination and that the retailers control the pricing decisions.
- Section 5 of the FTC Act (Unfair Methods of Competition): The FTC has broad authority to challenge practices that it deems anticompetitive or harmful to consumers, even if they don’t fit traditional antitrust frameworks. If Eversight’s pricing experiments lead to price harmonization across competing retailers, the FTC could argue that the practice reduces price competition.
B) Consumer Protection Risks:
- Section 5 of the FTC Act (Deception): The primary consumer protection risk comes from the possibility that shoppers were not adequately informed that they were being exposed to randomized price tests. If consumers believed they were receiving uniform pricing and were instead subjected to hidden variations, the FTC could argue that Instacart’s actions were deceptive under Section 5 of the FTC Act.
- Unfairness: If consumers were exposed to higher prices without their knowledge and the pricing variation was not “reasonably avoidable,” regulators might consider the practice an unfair trade practice, especially in essential markets like groceries.
Given the widespread scrutiny over dynamic pricing and price transparency in the tech and retail sectors, Instacart’s pricing practices could become a flashpoint for broader regulatory action aimed at protecting consumer rights and ensuring fair market competition.
5) What Did Instacart Do That Could Have Invited Scrutiny?
Several factors likely contributed to the FTC investigation:
- Publicity of Pricing Variations: The consumer report highlighted significant price discrepancies between consumers, which undermines consumer confidence in price fairness.
- Marketing Language: Instacart’s emphasis on “automated price testing” and “millions of price permutations” could invite regulators to question whether this system inadvertently facilitates price collusion among competitors.
- Political Sensitivity: With increasing attention on pricing fairness, especially in essential goods like groceries, the FTC’s interest in Eversight reflects broader concerns about algorithmic pricing and its potential to harm consumers.
6) What Can We Expect Moving Forward?
At this stage, the FTC’s investigation is ongoing, and it is unclear whether it will result in formal charges. However, Instacart’s decision to halt item price tests on its platform indicates a preemptive effort to address consumer concerns and align with regulatory expectations. The company has emphasized that Eversight’s tools are designed to optimize pricing, not manipulate consumers through hidden or deceptive practices.
Given the FTC’s evolving stance on pricing algorithms and consumer protection, this case will likely set important precedents on how tech platforms and retailers implement AI-driven pricing tools while balancing innovation with transparency.
Key Takeaways for Retailers and Brands:
- Transparency Is Critical: Ensure that any price experimentation or dynamic pricing tool clearly discloses pricing strategies to consumers. Regulatory scrutiny is intensifying around pricing transparency and consumer protection in AI-driven pricing systems.
- Watch for Antitrust Concerns: Retailers should be cautious about using pricing tools that might inadvertently lead to price coordination or reduce market competition.
- Prepare for Scrutiny: As more companies use AI in pricing, the FTC and state attorneys general are likely to ramp up enforcement. Retailers should proactively evaluate their pricing practices for potential risks under consumer protection and antitrust laws.
For answers to further questions or detailed guidance on pricing practices and regulatory compliance, please contact Robin Crauthers.