McDonald's Sued Over AI-Powered Price Coordination Allegations

McDonald's is facing a federal lawsuit in Chicago over allegations that it illegally coordinates menu prices across its franchises using an AI-powered pricing system. The proposed nationwide class action, filed on Friday, claims the fast-food giant violated US antitrust laws by conspiring with franchisees to fix prices through algorithms trained on nonpublic data.

The lawsuit references a recent Reuters report, which revealed that McDonald's pricing engine uses machine-learning algorithms to analyze data from millions of daily transactions across nearly 14,000 restaurants. The complaint argues that independent businesses must set their prices independently, rather than relying on AI-driven recommendations.

McDonald's has denied the allegations, stating in a Monday statement that its AI system does not set menu prices. The company emphasized that franchisees make their own pricing decisions and that the use of pricing tools and analytics is common across industries.

The plaintiff, an Illinois resident, is seeking to represent a class of potentially millions of McDonald's customers. The lawsuit follows a trend of recent class actions alleging that companies have used algorithms or AI to illegally coordinate prices for various goods and services.