McDonald’s Sued Over AI Pricing Tool in Antitrust Case
McDonald’s (MCD) is now the subject of a nationwide class-action lawsuit, with the plaintiff alleging that the fast-food chain used an AI-powered pricing tool to fix menu prices across its company-owned and franchised locations. The lawsuit, filed on October 2 in a Chicago federal court by an Illinois customer, claims that McDonald’s utilized sales data from its stores to train an AI system. This system then provided price recommendations to franchise owners, allegedly enabling price-fixing that violates U.S. antitrust laws.
The case follows a Reuters report that detailed how McDonald’s AI tool analyzes millions of daily sales from nearly 14,000 U.S. stores to suggest “optimal prices” for menu items. McDonald’s has vigorously denied the allegations, stating that its AI tools only offer price suggestions and that franchise owners ultimately decide the final prices. The company also emphasized that it does not engage in real-time price adjustments or personalize pricing based on individual customers’ willingness to pay.
This legal battle could set a precedent for how AI-driven pricing tools are regulated under U.S. antitrust laws. It may also highlight the broader implications of AI systems that use aggregated store data to influence competition. The plaintiff seeks to represent millions of McDonald’s customers in the lawsuit.
Analysts have responded to recent challenges facing McDonald’s by adjusting their price targets. Guggenheim’s Gregory Francfort lowered his target for MCD to $250 from $290, citing weaker U.S. sales, slower store growth, and increased spending. He now expects lower earnings for 2027 and 2028 compared to consensus estimates. Wells Fargo’s Zachary Fadem also reduced his target to $270 from $300, pointing to near-term pressures from weak sales, competition, and higher interest rates. Despite these concerns, Fadem remains optimistic about McDonald’s long-term prospects due to its strong brand and global reach.
On TipRanks, McDonald’s has a Moderate Buy consensus rating, with an average price target of $295.04, suggesting a potential 26.6% upside from current levels. Year-to-date, MCD shares have fallen 22.3%.