Lawmakers Address “Dynamic Pricing” Issues
Legislators are taking steps to address “dynamic pricing” practices, as reported by The Post. This follows revelations that grocery delivery service Instacart was charging varying prices for the same items at a single store without informing customers.
Lindsey Owens, the executive director of the consumer advocacy group Groundwork Collaborative, expressed to The Post, after a meeting with 15 Congress members, that there is a strong sense of frustration and concern among them. They are “engaged and ready” to look into possible legislative and oversight actions.
The report highlighted that Instacart was applying significantly different prices to customers at major retailers like Target, Kroger, Safeway, Albertsons, and Costco. This came just after Senator Ruben Gallego (D-Ariz.) proposed a bill aiming to prohibit such practices.
Gallego remarked, “Greedy companies are harvesting Americans’ personal data and using AI to find their ‘problem’: the maximum amount they are willing to pay. That isn’t fair pricing; it is predatory pricing. My bill would put an end to that.”
He referenced a January study by the Federal Trade Commission indicating that retailers often use personal data—including a customer’s location and the type of device they’re using—to customize prices.
In the House, lawmakers are looking into methods to regulate dynamic pricing, which sometimes relies on AI tools to analyze customer data.
Owens shared that they were eager to learn what types of laws could be enacted to safeguard consumers against such practices. She emphasized that all meeting attendees were Democrats.
Representative Jimmy Gomez (D-Calif.) indicated they are contemplating measures to reduce costs and address this pricing strategy. He highlighted, “If Instacart’s AI pricing is secretly, unfairly, or deceptively forcing some individuals to pay more for the same groceries, that’s a significant issue.”
Implementing any dynamic pricing regulations will require support from Republicans, as the House and Senate are led by the GOP.
Concerns over the rising cost of living have garnered attention from various political viewpoints recently.
A report from Groundwork Collaborative revealed that Instacart charged a Target customer $2.99 for a jar of Skippy Creamy Peanut Butter in North Canton, Ohio, one September day, while other customers paid as much as $3.59 for the identical item from the same location that day.
In response to these findings, Target issued a statement clarifying that it is “not affiliated with Instacart and is not responsible for prices on the Instacart platform.”
Owens suggested that Instacart might be trying to gauge how much profit they could generate from Target shoppers. She noted, “In a place like Target that isn’t really known for being budget-friendly, Instacart probably thought, ‘This is an interesting place to explore higher markups.’”
Instacart did not provide a comment when asked. Previously, the company told The Post that their pricing “testing” has concluded, asserting that prices aren’t based on individual shopper characteristics nor do they fluctuate in real-time.
