Instacart Settles FTC Deceptive Practices Claims for $60M
Grocery delivery giant Instacart has agreed to pay $60 million in customer refunds to settle allegations from the Federal Trade Commission (FTC) that the company engaged in deceptive practices. These practices allegedly harmed shoppers and inflated grocery costs. The settlement, announced on Thursday, resolves claims that Instacart falsely advertised “free delivery” while charging service fees of up to 15% that customers had to pay to receive their groceries.
The FTC also accused Instacart of failing to clearly disclose that free trial memberships for its Instacart+ subscription service would automatically convert to paid memberships at $99 per year. “Instacart misled consumers by advertising free delivery services—and then charging consumers to have groceries delivered,” said Christopher Mufarrige, director of the FTC’s consumer protection bureau. According to the agency, hundreds of thousands of customers were charged membership fees without receiving benefits or refunds.
While Instacart denied any wrongdoing, the company stated it reached the settlement to move forward and focus on its business. The San Francisco-based company also faces a separate FTC investigation into its AI-powered pricing practices. This comes after reports found that customers were quoted different prices for identical items at the same stores. Following the announcement, Instacart shares fell 1.5%.
Source: FTC Press Release