Global grocery delivery service Instacart has been ordered to pay $60 million (approx. KES 7.8 billion) in refunds to customers after settling a lawsuit with the U.S. Federal Trade Commission (FTC) over deceptive business practices. The landmark ruling puts a spotlight on the tactics of international tech companies and their obligations to consumers, a matter of growing urgency in Kenya.

The core of the issue lies in what the FTC described as a series of misleading strategies designed to lure and lock in customers. The American consumer protection agency found that Instacart advertised "free delivery" promotions while hiding mandatory "service fees" that could increase an order's cost by up to 15%. This case serves as a critical reminder for Kenyan shoppers navigating an e-commerce landscape where hidden charges can often inflate the final bill at checkout.

Hidden Fees and Broken Promises

The investigation by the FTC, America's top consumer watchdog, uncovered several harmful practices. Instacart was accused of not only misleading users about delivery costs but also of failing to honour its advertised "100% satisfaction guarantee." Instead of full refunds for poor service or late deliveries, customers were often given small credits for future orders, with the full refund option obscured within the app.

Furthermore, the FTC found that Instacart automatically enrolled customers into its paid subscription service, Instacart+, after a free trial without their explicit consent. "Instacart misled consumers by advertising free delivery services—and then charging consumers to have groceries delivered," noted Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.

• Deceptive 'Free Delivery': Mandatory service fees of up to 15% were not clearly disclosed.
• Subscription Traps: Users were automatically billed for Instacart+ membership after free trials without clear consent.
• Misleading Guarantees: The company offered small credits instead of the promised full refunds for service failures.

The Kenyan Connection: A Call for Vigilance

While Instacart does not operate directly in Kenya, this ruling resonates deeply with the local market, where online delivery platforms are surging. According to the Competition Authority of Kenya (CAK), a significant number of consumer complaints in the digital space go unresolved. Kenyan law, under the Consumer Protection Act of 2012, guards against unfair trade practices and misleading advertising, granting consumers the right to accurate information and redress.

However, challenges in enforcement and consumer awareness persist. A recent CAK study revealed that 60% of complaints against digital platforms are not addressed, leaving many Kenyans feeling powerless. This Instacart settlement is a powerful precedent, demonstrating that regulators can hold major tech firms accountable for opaque and unfair practices.

Instacart has denied the FTC's allegations of wrongdoing but agreed to the settlement to move forward. The company must now make its pricing and subscription terms transparent and obtain explicit consent from users before charging them. For Kenyan consumers, the message is clear: scrutinize the terms and conditions of online services and demand the transparency that our own laws are meant to guarantee.