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McDonald's is facing a federal lawsuit accusing the company of using AI pricing tools that unfairly drive up menu prices. The proposed class-action lawsuit, filed in Chicago, claims the fast-food giant uses AI to coordinate prices across its franchises and company-owned restaurants, violating U.S. antitrust laws. The lawsuit alleges that McDonald's AI-powered pricing system shares non-public sales and pricing data, amounting to illegal price-fixing.
According to a report by SCNow, the lawsuit highlights disparities in menu prices at different McDonald's locations. For instance, two McDonald's restaurants in Fresno, California, charged significantly different prices for a Big Mac, with one location charging $5.69 and another $6.89. The lawsuit suggests that McDonald's pricing engine, which uses machine-learning algorithms to analyze data from millions of daily transactions, is responsible for these price differences.
McDonald's, however, denies these allegations, stating that franchisees set their own prices and that the AI pricing tools are optional. The company emphasized that AI does not set the price of menu items and called the claims speculative and uninformed. McDonald's spokesperson said that pricing recommendation tools and analytics are common across industries and do not constitute price-fixing.
The case could have broader implications as lawmakers and regulators across the country examine the use of AI to set consumer prices. Similar class actions have been filed against other companies accused of using algorithms to coordinate prices for hotel rooms, apartment rentals, and other purchases. The outcome of this lawsuit could set a precedent for how AI is used in pricing strategies across various industries.