McDonald’s sued over alleged AI-driven price-fixing scheme

McDonald’s is facing a proposed nationwide class action lawsuit alleging that it illegally coordinates menu prices across its franchises and company-owned restaurants using an AI-powered pricing system. The lawsuit, filed in federal court in Chicago on Friday, claims that the fast-food giant violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on nonpublic data. The legal action references a recent Reuters article that detailed how McDonald’s pricing engine uses machine-learning algorithms to analyze data from millions of daily transactions across its nearly 14,000 restaurants.

McDonald’s has denied the allegations, stating in a Monday press release that its AI system does not set the price of menu items such as the Big Mac. The company emphasized that franchisees make their own pricing decisions and that the use of pricing recommendation tools and analytics is common across various industries. The lawsuit seeks to represent a class of potentially millions of McDonald’s customers, with the plaintiff, an Illinois resident, accusing the company of leveraging its data to overcharge consumers.

The lawsuit is part of a broader trend of class actions alleging that companies use algorithms or AI to illegally coordinate prices for services like hotel rooms and apartment rentals. Lark Turner, a lawyer for the plaintiff, criticized McDonald’s for what he described as a strategy to ‘nickel-and-dime consumers down to the last French fry.’ The case highlights growing concerns about the use of AI in pricing strategies and its potential implications for antitrust law.