McDonald's AI-Driven Prices Spark Concerns Over Customer Fairness and Antitrust Scrutiny

McDonald's has been using artificial intelligence to guide menu prices across its nearly 14,000 US and global restaurants. The company's pricing engine uses machine-learning algorithms to analyze data from daily transactions and generate 'the optimal price' at each location for every menu item.

The system recommends prices based on customer willingness to pay in a given area, with franchisees able to adjust them according to their needs. However, some franchisees have reported feeling pressured by corporate to use the AI-recommended prices, which can result in significant variations between stores.

For example, a Reuters check of prices on McDonald's mobile app showed that a Big Mac cost $5.69 at one company-run store in Fresno, California, but $6.89 at another two miles away, a 21% premium. While McDonald's says franchisees are free to set their own prices, the company tracks and records any deviations from AI-recommended prices.

The use of AI pricing has raised concerns about potential regulatory risks, particularly regarding antitrust scrutiny. As more companies adopt algorithmic pricing practices, courts and regulators may scrutinize whether they facilitate illegal coordination between competitors.