Instacart to pay $60 million to settle FTC claims over deceptive free-delivery offers
FTC says Instacart misled shoppers about Instacart+ benefits and failed to warn about free-trial conversions; agency continues to scrutinize pricing practices in online-delivery market
San Francisco — The Federal Trade Commission on Thursday announced that Instacart will pay $60 million to settle allegations that the online grocery-delivery platform deceived consumers about Instacart+ membership and its free-delivery offers. The FTC said the 'free delivery' promise for first orders was illusory because shoppers were charged other fees, and that Instacart did not adequately notify shoppers that free-trial periods would convert to paid memberships or clearly disclose refund terms.
According to the FTC, the offer was illusory because shoppers were charged other fees, and the agency said Instacart did not adequately disclose that free-trial periods would convert to paid Instacart+ memberships or clearly disclose refund terms.
Instacart, for its part, denied the allegations and said the settlement would allow the company to focus on shoppers and retailers. A company spokesman said Instacart provides straightforward marketing, transparent pricing and fees, clear terms, easy cancellation and generous refund policies, all in full compliance with the law and exceeding industry norms.
FTC consumer protection chief Christopher Mufarrige said the agency will continue to monitor online-delivery platforms to ensure that pricing and delivery terms are transparent and competitive.
The case comes as a nonprofit study highlighted price differences for the same items at the same stores in some shopping sessions, prompting renewed scrutiny of pricing practices. Reuters reported that the FTC has demanded information about Instacart's Eversight pricing tool.
Instacart has said that retailers set prices, and that pricing tests run through Eversight are random and not based on user data.
While the settlement ends a regulatory dispute, the FTC said the case underscores ongoing scrutiny of how online-delivery services market memberships and price guarantees. The agency's broader review of pricing tools and transparency in online shopping is expected to continue as the market evolves.
The settlement between Instacart and the FTC follows a string of regulatory actions aimed at ensuring that consumers understand what they are paying for and when memberships auto-renew. Critics have pointed to the growing importance of clarity in promotional offers as online platforms expand their subscription models and add-on services. Instacart, however, maintains that its practices are consistent with applicable law and industry norms and emphasizes ongoing cooperation with regulators as it continues to serve shoppers and retailers alike.
