Instacart (CART) shares fell sharply in extended trading after a report said the U.S. Federal Trade Commission has opened an investigation into the company's pricing practices.
Reuters reported that the FTC sent Instacart a civil investigative demand, citing people familiar with the matter. The agency declined to confirm the probe but said it was troubled by media reports describing Instacart's alleged pricing methods.
The scrutiny follows a recent study showing that prices for identical items at the same supermarkets can differ by about 7 percent when ordered through Instacart, potentially adding more than $1,000 a year to a customer's grocery bill. Instacart has said retailers, not the platform, ultimately set prices shown in the app.
Questions around pricing intensified after Instacart's 2022 acquisition of Eversight, an AI-based pricing and promotions firm. At the time, Instacart said the deal was intended to help retailers offer real-time savings opportunities.
Instacart declined to comment directly on the reported investigation, but said its pricing system has been misunderstood. The company said retail partners control pricing decisions and that any testing conducted is not dynamic or surveillance-based pricing. It said prices do not change in real time, are not tied to supply and demand, and are not based on personal or behavioral data, describing the process instead as randomized A/B testing similar to methods long used by retailers.
The issue has also drawn political attention. Earlier Wednesday, U.S. Representative Robert Garcia of California asked Instacart CEO Chris Rogers to provide details on how prices are set, saying algorithm-driven pricing could be worsening financial pressure on consumers.
On Thursday, CART closed at $44.95, down 1.53%, and is trading after hours at $44.94, off 0.02%, on the NasdaqGS.
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