Grocery delivery company Instacart has agreed to pay $60 million to refund consumers who were allegedly misled into signing up for its subscription service, Instacart+, according to the Federal Trade Commission.
The settlement resolves a consumer protection case filed in California federal court against Maplebear Inc., the corporate entity that operates Instacart. The FTC said the company used deceptive marketing practices that caused consumers to unknowingly enroll in recurring subscriptions.
Allegations Over “Free” Orders and Subscription Disclosures
According to the FTC’s complaint, Instacart misled consumers by advertising their first order as “free” while still charging mandatory grocery delivery fees. Regulators said the company failed to clearly disclose the terms of its Instacart+ subscription and made it difficult for consumers to obtain refunds.
Instead of issuing refunds, Instacart allegedly provided customers with credits that could only be used toward future orders. The FTC said those practices violated federal consumer protection laws designed to ensure transparency and informed consent.
Instacart Denies Wrongdoing
Instacart pushed back against the allegations, saying it does not agree with the FTC’s findings.
In a statement, the company said it “flatly denies any allegations of wrongdoing” and argued that the foundation of the agency’s inquiry was flawed. Instacart added that it stands by the “integrity, transparency and value” of its subscription offerings, even as it agreed to the settlement.
AI Pricing Practices Draw Additional Scrutiny
The settlement comes amid renewed scrutiny of Instacart’s pricing practices. A December report by Consumer Reports raised concerns that the company’s AI-enabled experiments could charge different customers different prices for the same products.
Instacart disputed the findings, saying the report incorrectly grouped together A/B testing, dynamic pricing, and surveillance pricing. The company previously acknowledged that the FTC had sent inquiries related to its use of AI-based pricing tools.
FTC Targets Subscription Cancellation Practices
The Instacart case is part of a broader FTC effort to crack down on what it calls “subscription traps” — digital services that are difficult to cancel or lack clear disclosures.
Earlier this year, Amazon.com agreed to pay $2.5 billion to resolve allegations that its Prime subscription service made cancellation unnecessarily complex.
The FTC also has an active case against Adobe Inc., alleging that annual subscriptions for products such as Photoshop were marketed deceptively. Adobe has denied the claims and is challenging the case in court.
Uber Also Faces Similar FTC Action
Another high-profile case involves Uber Technologies Inc., which is facing an FTC lawsuit over its subscription practices. Earlier this week, 21 US states and the District of Columbia joined the agency’s case against Uber.
Uber has denied any wrongdoing and is contesting the allegations, signaling that the legal battle could extend well into the future.
Broader Implications for Digital Subscription Services
The $60 million Instacart settlement underscores growing regulatory pressure on digital platforms to provide clear pricing, transparent subscription terms, and easy cancellation options.
As regulators intensify oversight, companies offering recurring subscriptions may face increased compliance costs and legal exposure if their marketing or billing practices fall short of consumer protection standards.
What Comes Next for Instacart
While Instacart avoided a prolonged court battle by agreeing to the settlement, the company remains under scrutiny for its pricing models and subscription practices. The case highlights how consumer complaints and regulatory action can quickly escalate into significant financial penalties for tech-enabled service providers.
