New York Attorney General Requests Instacart to Provide Details on Pricing Experiments

New York Attorney General Letitia James has taken a significant step by demanding information from Instacart regarding its pricing practices. This inquiry arises from concerns that the online grocery and retail delivery platform may have violated state laws requiring transparency in how consumer data is utilized to set prices.

This action follows a critical study conducted by Consumer Reports and other nonprofit organizations across four U.S. cities. The findings revealed that Instacart displayed varying prices for the same groceries to different shoppers, leading to an average cost difference of 7% for identical grocery lists at the same store. Such discrepancies have raised eyebrows and prompted scrutiny of the company’s pricing strategies.

In response to the backlash, Instacart announced in December that it had halted its price experiments, including those conducted through its Eversight artificial intelligence pricing tool. The company emphasized that these tests were randomized and not based on personal data or shopper characteristics.

Despite this, Instacart included a disclaimer on some of its store pages, mandated by New York law, stating that prices were “set by an algorithm using your personal data.” The disclaimer further noted that “certain prices and/or fees may vary based on randomized tests,” and that personal information, such as delivery addresses, was used to calculate fees, along with offering personalized incentives.

Attorney General James expressed concerns that these disclaimers may not meet the clarity requirements set forth by New York law. She stated, “Instacart’s pricing experiments raise serious concerns about its use of algorithmic pricing, and I will not hesitate to take action to enforce our laws and protect consumers.”

In her demand for transparency, James has called on Instacart to provide its pricing agreements with retailers and brands, as well as an explanation of how it selects customers for its pricing experiments. This request underscores the need for accountability in the rapidly evolving landscape of online retail.

An Instacart spokesperson responded to the inquiry, asserting that the company believes it is fully compliant with New York’s Algorithmic Pricing Disclosure Act. They expressed eagerness to address James’ questions, aiming to clarify any misunderstandings regarding their past and current pricing practices.

(Reporting by Jody Godoy in New York; Editing by Cynthia Osterman)

Photo: New York Attorney General Letitia James

Topics
New York

New York Attorney General Letitia James has taken a significant step by demanding information from Instacart regarding its pricing practices. This inquiry arises from concerns that the online grocery and retail delivery platform may have violated state laws requiring transparency in how consumer data is utilized to set prices.

This action follows a critical study conducted by Consumer Reports and other nonprofit organizations across four U.S. cities. The findings revealed that Instacart displayed varying prices for the same groceries to different shoppers, leading to an average cost difference of 7% for identical grocery lists at the same store. Such discrepancies have raised eyebrows and prompted scrutiny of the company’s pricing strategies.

In response to the backlash, Instacart announced in December that it had halted its price experiments, including those conducted through its Eversight artificial intelligence pricing tool. The company emphasized that these tests were randomized and not based on personal data or shopper characteristics.

Despite this, Instacart included a disclaimer on some of its store pages, mandated by New York law, stating that prices were “set by an algorithm using your personal data.” The disclaimer further noted that “certain prices and/or fees may vary based on randomized tests,” and that personal information, such as delivery addresses, was used to calculate fees, along with offering personalized incentives.

Attorney General James expressed concerns that these disclaimers may not meet the clarity requirements set forth by New York law. She stated, “Instacart’s pricing experiments raise serious concerns about its use of algorithmic pricing, and I will not hesitate to take action to enforce our laws and protect consumers.”

In her demand for transparency, James has called on Instacart to provide its pricing agreements with retailers and brands, as well as an explanation of how it selects customers for its pricing experiments. This request underscores the need for accountability in the rapidly evolving landscape of online retail.

An Instacart spokesperson responded to the inquiry, asserting that the company believes it is fully compliant with New York’s Algorithmic Pricing Disclosure Act. They expressed eagerness to address James’ questions, aiming to clarify any misunderstandings regarding their past and current pricing practices.

(Reporting by Jody Godoy in New York; Editing by Cynthia Osterman)

Photo: New York Attorney General Letitia James

Topics
New York