Instacart Parent’s Stock Drops. It Faces an FTC Investigation, Report Says.

Shares of Instacart-parent Maplebear have risen 10% this year so far through to Wednesday’s close. (Photo by Vanja Savic)

Key Points

• Maplebear shares fell 6% in premarket trading after reports of a Federal Trade Commission probe into Instacart’s pricing tool.
• The FTC is investigating Instacart’s Eversight pricing tool, which uses artificial intelligence for retailers to test different prices.
• An investigation found Instacart charged some consumers up to 23% more for identical grocery items at the same store.

Shares of Instacart-parent Maplebear were diving Thursday following a report that the Federal Trade Commission is probing the grocery-delivery company.

The FTC has sent Instacart a civil investigative demand as it looks for information about the company’s Eversight pricing tool, which allows retailers on its platform to experiment with different prices using artificial intelligence, Reuters reported, citing sources familiar with the matter.

Maplebear shares were down 1.3% in morning trading.

The FTC told Reuters that it doesn’t comment on potential or ongoing investigations but the agency was “disturbed by what we have read in the press about Instacart’s alleged pricing practices.”

“Much of what’s been reported has mischaracterized how pricing works on Instacart,” a company spokesperson said in an emailed statement. “First, our retail partners control their pricing strategies, and we work with them to align their online and in-store pricing wherever possible. Second, these tests are not dynamic pricing nor surveillance pricing – prices on Instacart do not change in real time nor are they based on supply or demand, and we never use personal, demographic, or user-level behavioral data to set item prices.”

As Barron’s recently wrote, prices being set by AI are becoming more prevalent. Instacart recently charged up to 23% more to different consumers for the same grocery items at the same store, according to an investigation by Consumer Reports and Groundwork Collaborative.

In a previous blog post, Instacart said a very small group of retailers use Eversight, “to run limited online pricing tests.”

Write to Adam Clark at adam.clark@barrons.com