Instacart settles Federal Trade Commission’s claim it deceived US shoppers

The US Federal Trade Commission (FTC) has agreed to pay Instacart $ 60 million in refunds in response to allegations that the online grocery delivery service defrauded customers with its membership program and free delivery offers.

The FTC claimed that Instacart’s offer of “free delivery” for first orders was illogical due to the fact that customers were being charged additional fees.

Additionally, the organization charged Instacart with misleading customers about its refund policy and failing to adequately notify customers about the conversion of their free trials of its Instacart+ subscription service to paid memberships.

According to Christopher Mufarrige, the FTC’s lead advocate for consumer protection, “The FTC is focused on monitoring online delivery services to make sure that competitors are transparently competing on price and delivery terms.”

The settlement allows the company to concentrate on customers and retailers, according to a spokesperson for Instacart. The company categorically refutes any allegations of wrongdoing.

The spokesperson stated that we adhere to industry standards and provide straightforward marketing, transparent pricing and fees, clear terms, simple cancellation, and generous refund policies.

After a recent study by nonprofit organizations discovered that individual shoppers at the same stores received different prices for the same items, the shopping platform is currently being scrutinized.

According to a report released on Wednesday by the news agency Reuters, the FTC is looking into the business and has requested information about Instacart’s Eversight pricing tool.

According to Instacart, retailers are accountable for setting prices, and Eversight pricing tests are random and do not rely on user data.

The use of artificial intelligence (AI) to adjust prices was criticized by the executive director of the economic think tank Groundwork Collaborative, Lindsay Owens.

Instacart chose to conduct AI experiments that are quietly raising prices, according to Owens in written remarks made to Al Jazeera. “At a time when families are being squeezed by the highest grocery costs in a generation, families are being squeezed by the highest prices in a generation.

She also demanded that US President Donald Trump’s administration take action to stop future price manipulation.

While the FTC’s investigation is good news, Owens argued that meaningful action must be taken to put an end to these exploitationist pricing practices and protect consumers. For their algorithmic price manipulation, Instagram must be held accountable, not just a slap in the wrist.