By: Abe Wertenheim- Jewish Voice News

In a revelation that shines a proverbial spotlight on the growing anxieties surrounding artificial intelligence in consumer markets, a joint investigation by Consumer Reports and Groundwork Collaborative has found that Instacart, the dominant U.S. online grocery delivery platform, has been using AI-driven pricing experiments to quietly charge different customers different prices for the same items — in some cases with disparities approaching 20 percent. As CNN reported on Wednesday, the study suggests that millions of Americans are unwitting participants in price-manipulation tests that are reshaping basic assumptions about transparency, fairness, and affordability in the digital economy.

The report paints a portrait of a marketplace increasingly governed by opaque algorithms that respond to users not as equals but as data profiles — consumers with individualized “price sensitivity” thresholds determined by how likely they are to tolerate incremental increases before abandoning a purchase. Unlike traditional dynamic pricing, where costs shift instantaneously in response to supply, demand, or external pressures, this mechanism tailors prices to the perceived psychology of each shopper. According to the investigators — and as the CNN report emphasized — the result is a system in which families buying identical groceries may unknowingly pay substantially different amounts depending on their digital footprint.

The researchers selected Instacart precisely because of the company’s enormous footprint: more than 250 million orders in the first three quarters of 2025. As the CNN report noted, the platform now functions as a central gateway through which millions of households access groceries from chains such as Safeway, Costco, Albertsons, Kroger, and Target.

The study involved 437 volunteer shoppers, each tasked with purchasing the exact same set of items from the exact same store through Instacart’s interface. Every single participant, CNN reported, was subjected to algorithmically generated price shifts. The disparities were not trivial. A dozen eggs at one Washington, D.C., Safeway location ranged from $3.99 to $4.79 depending on the shopper — a nearly 20 percent variance for a staple product.

Another example involved Safeway’s private-label cornflakes, which appeared to fluctuate from $2.99 to $3.69 — a 23 percent spread. Over time, such adjustments can have meaningful financial consequences. According to the investigation, consumers could see an annual cost swing of roughly $1,200 solely due to Instacart’s AI-enabled pricing experiments.

In a grocery environment already strained by tariffs, immigration policies affecting agricultural labor, and extreme weather disrupting supply chains — factors CNN has repeatedly reported as contributors to rising food prices — the discovery of AI-based individualized pricing adds an additional layer of concern for households already struggling to budget.

Perhaps the most damning element of the investigation came from an inadvertent slip. As the  CNN report recounted, a Costco representative accidentally forwarded to Consumer Reports an email exchange between Instacart and Costco that explicitly referenced the testing of price sensitivity models. This correspondence appears to confirm what Consumer Reports and Groundwork Collaborative suspected: that Instacart was deliberately leveraging AI to gauge the maximum price each shopper would tolerate before opting out of a purchase.

The intention is not merely to monitor purchasing habits but to push against them — to discover, through iterative experimentation, how to optimize revenue by raising prices on certain individuals while keeping others stable.

When presented with these findings, Instacart did not deny the practice. Instead, a spokesperson told CNN that only “a subset of 10 retail partners” employ markup-based price testing on their digital storefronts and that such trials were both “limited” and “randomized.” According to Instacart, these tests ultimately help retailers “decide which essential items to keep affordable.”

But critics argue that Instacart’s explanation sidesteps the central issue: consumers are not told that their pricing is being modified based on algorithmic predictions about their behavior. What Instacart calls experimentation, others see as covert exploitation.

The joint report makes clear that the fundamental problem lies not only in the higher prices themselves but in the erosion of transparency. If each user sees a personalized price — and no one can discern whether they are being overcharged relative to someone else ordering from the same store — then traditional consumer protections such as comparison shopping become nearly impossible to exercise.

“Corporate practices like these increase prices for American families,” the report states. “When prices are not transparent, shoppers can’t comparison-shop. When prices are not predictable, shoppers can’t properly budget.”

Budgeting, the report notes, requires a stable and comprehensible marketplace. But when AI quietly recalibrates prices based on past behavior, browsing patterns, or inferred financial status, the foundation of consumer autonomy weakens. The modern grocery cart becomes a floating target.

The Instacart revelations underscore a broader policy vacuum surrounding algorithmic pricing. As CNN has frequently reported, regulators are only beginning to grapple with the significance of AI-driven commercial practices — and, crucially, the distinction between dynamic market pricing and targeted price discrimination.

Most existing consumer-protection laws were crafted for a pre-algorithmic era, when pricing fluctuations were public, not personalized. Today, however, algorithms can identify shoppers who are less likely to compare prices, more likely to purchase premium brands, or more tolerant of price increases — and adjust accordingly.

Some economists argue that such “first-degree price discrimination” undermines the spirit, if not always the letter, of consumer fairness doctrines. If two shoppers standing in the same supermarket aisle are shown different prices based on corporate calculations about their vulnerability, the marketplace ceases to be neutral.

In its statement to CNN, Instacart stressed that retailers — not Instacart itself — control their digital pricing and that the app displays each retailer’s pricing policy prominently. It also noted that online grocery prices have always differed from in-store prices because of labor, logistics, and delivery fees.

But critics counter that this argument obscures the core issue. Consumers already expect online markups; what they do not expect is that the markup is tailored to their personal perceived willingness to pay.

Furthermore, if only “a subset” of retailers employ AI experimentation on Instacart, the platform’s lack of transparency makes it impossible for customers to know whether they are part of the test group. For a service with hundreds of millions of orders per year, even a small subset represents an enormous volume of experimentation on unknowing households.

The investigation arrives at a moment when public frustration with rising grocery prices is reaching a crescendo. As CNN reported, families are already contending with the effects of inflation, volatile supply chains, and reduced domestic agricultural output. In this climate, the psychological burden of feeling manipulated — of suspecting that invisible digital systems are squeezing household budgets even further — intensifies the public distrust of major tech-adjacent platforms.

For lower-income families, these experiments may be especially harmful. Research consistently shows that those with the least disposable income are the most sensitive to shifts in grocery prices. Ironically, price-sensitivity algorithms may identify these families as the easiest targets for incremental increases — because they tend to stick to routine purchases, or because the cost of switching retailers or platforms feels too high.

The Consumer Reports investigation, amplified by CNN’s national coverage, is likely to reignite federal and state debates about algorithmic transparency, AI governance, and digital consumer rights. Lawmakers have already begun scrutinizing AI-driven tools in sectors such as housing, employment, and insurance. Grocery pricing — once the domain of physical tags and weekly circulars — may now become the next major battleground.

Instacart, for its part, maintains that its practices fall well within industry norms and that AI experimentation ultimately benefits consumers. But as the digital grocery economy grows and reliance on services such as Instacart increases, the question remains: Should algorithms determine not just what we buy, but how much each of us individually pays?

For millions of American households already stretched thin, the findings of this investigation may feel less like innovation and more like exploitation — a reminder that in the age of AI-mediated commerce, even the price of a dozen eggs can no longer be taken at face value.