Washington, D.C. — Today, Doordash announced its $17 billion acquisition of Instacart, which controls an estimated 58% of the U.S. third-party grocery delivery market and competes with DoorDash in restaurant delivery through a 2024 partnership with Uber Eats. The deal comes as Doordash — which already controls two-thirds of U.S. restaurant delivery market —  rapidly expands its grocery and retail volume. In response, the American Economic Liberties Project is calling on the Federal Trade Commission (FTC) to block this deal:

“This is a brazen merger given the amount of heat on both companies for ongoing harms to restaurants, grocers, delivery drivers and consumers,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “Instacart and Doordash have spent the better part of a decade bullying main street businesses and denying fair pay and benefits to their combined 9 million workers. This merger represents the next frontier of data-driven abuse, exploiting massive asymmetries of power to squeeze worker compensation on the way in and drain consumer wallets on the way out.”

“No one with a clear conscience believes a food delivery monopoly is in the best interests of the public,” added Hepner. “There’s no useful mitigation short of blocking this outright, which the FTC or any State Attorney General must now do.”

Both companies have long records of abusing the business that depend on them, from predatory 30% commissions, price parity restraints, forced listing of restaurants without their consent, to the unfair practices independent grocers described in a letter to the FTC earlier this year, warning that “market discipline alone cannot correct” the imbalance of power between platforms and independent grocers. Doordash is currently being sued by Uber, for allegedly using its market power to block restaurants from listing on rival platforms.

The proposed deal comes amid mounting scrutiny of both platforms’ use of surveillance pricing. A Consumer Reporters investigation found Instacart’s AI pricing experiments inflated prices by as much as 23%, and state and federal enforcers have opened investigations into InstaCart’s pricing practices as surveillance-pricing bans sweep the states. Instacart claims it has ended these price tests, but this merger would hand DoorDash, which is itself under FTC scrutiny over surveillance pricing, the same troves of sensitive customer data and pricing technology. 

Workers fare no better with this deal. Last month, Doordash agreed to a record $13.15 million settlement with New York City over allegations it underpaid and failed to pay delivery workers, after a city report found Uber and Doordash cost workers $550 million in tips. A California court already found Instacart liable for missclassifying its drivers, after which Instacart and DoorDash spent a combined $82 million to pass CA Proposition 22, and override the state’s gig worker protections. 

Read Economic Liberties’ September 2020 Report, “Rescuing Restaurants: How to Protect Restaurants, Workers, and Communities from Predatory Delivery App Corporations.”

Learn more about Economic Liberties here.