Klobuchar, Booker, Colleagues Press the FTC to Investigate Instacart’s Dynamic Pricing

Letter urges for investigation to determine if the use of dynamic pricing violates the FTC Act

WASHINGTON - U.S. Senators Amy Klobuchar (D-MN), Ranking Member on the Subcommittee on Privacy, Technology, and the Law, and Cory Booker, Ranking Member on the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, led their colleagues in pressing Federal Trade Commission (FTC) Chair Andrew Ferguson to investigate Instacart's use of dynamic pricing.

Citing a recent study, the letter urges the Commission to investigate whether Instacart's pricing strategy violates the FTC Act's prohibitions on unfair methods of competition and unfair or deceptive acts and practices; to reopen its market study on surveillance pricing; and to determine whether the FTC needs additional authority to protect consumers from potential harms that stem from these pricing practices.

"We write to express our deep concern after a recent study found that Instacart was offering substantially different prices to different consumers for the same items, from the same stores, purchased at the same time. If true, such practices may result in higher overall prices, deter competition, and potentially run afoul of the Federal Trade Commission (FTC) Act's prohibitions on unfair methods of competition and unfair or deceptive acts and practices," wrote the Senators.

"In competitive markets, retailers should be incentivized to reduce prices to draw customers from their competitors. But dynamic and surveillance pricing-especially models built on sensitive personal or competitive information-upend this foundational principle of the free market, allowing firms to set prices based on a person's willingness to pay instead of market factors." the Senators concluded.

Along with Klobuchar and Booker, the letter was signed by Senators Richard Blumenthal (D-CT), Dick Durbin (D-IL), Peter Welch (D-VT), Tammy Baldwin (D-WI), and Jeff Merkley (D-OR).

The full text of the letter is below and can be found here.

Dear Chair Ferguson:

We write to express our deep concern after a recent study found that Instacart was offering substantially different prices to different consumers for the same items, from the same stores, purchased at the same time. If true, such practices may result in higher overall prices, deter competition, and potentially run afoul of the Federal Trade Commission (FTC) Act's prohibitions on unfair methods of competition and unfair or deceptive acts and practices. We urge the Commission to investigate this potential use of dynamic pricing to determine if it violates the FTC Act and whether the FTC needs additional authority to protect consumers from potential harms that stem from dynamic or surveillance pricing practices.

A recent study found that some prices for the same products on Instacart varied by over 20 percent despite being purchased at the same store and under the same circumstances. For example, the study found that prices for everyday staples like sliced turkey, cornflakes, apples, crackers, and peanut butter all varied in price by more than 20 percent. Instacart's dynamic pricing strategy reportedly affected nearly three-quarters of the products tested and was applied to each person who participated in the study. The study concluded that "corporate practices like these increase prices for American families."

In July 2024, the FTC sought information from eight companies as part of a market study on "surveillance pricing" to better understand how firms use personalized data and algorithmic tools to set individualized prices. In January 2025, the FTC issued a "staff perspective" on its ongoing study, noting that the practice of personalized pricing is becoming widespread and merits additional study. Unfortunately, the FTC appears to have shuttered further work on that market study, depriving the policymakers-and the public-of information vital to understanding the implications of this practice.

We are concerned that surveillance pricing, like that described by the FTC's market study, and dynamic pricing, like that found in the recent study of Instacart, can make pricing information more opaque to consumers and raise barriers for price competition and comparison shopping. These practices also incentivize companies to collect sensitive personal user data to aid in setting personalized prices.

Additional antitrust concerns are raised if Instacart is setting or recommending prices for multiple companies that should be competing on price. Instacart has said that some of its retail partners use its algorithmic pricing product to optimize online pricing for its clients. Competitors should not be outsourcing pricing decisions to common algorithmic tools, especially those that have access to a competitor's sensitive data.

In competitive markets, retailers should be incentivized to reduce prices to draw customers from their competitors. But dynamic and surveillance pricing-especially models built on sensitive personal or competitive information-upend this foundational principle of the free market, allowing firms to set prices based on a person's willingness to pay instead of market factors.

We are deeply concerned that Instacart's pricing tactics may result in higher food prices, less competition, fewer opportunities to comparison shop, more incentive for companies to collect sensitive personal data, and increased customer confusion-potentially in violation of the FTC Act. In light of these concerns, we urge the Commission to re-open its previous market study on surveillance pricing issues and investigate whether Instacart's dynamic pricing violates the FTC Act.

###