McDonald’s Sued Over Alleged AI-Powered Menu Price Coordination
McDonald’s has been sued in federal court in Chicago in a proposed nationwide class action alleging that the fast-food giant illegally coordinated menu prices across its franchised and company-owned restaurants using an AI-powered pricing system.
The lawsuit, filed on Friday, alleges that McDonald’s violated US antitrust laws by conspiring with independent franchisees to fix prices through algorithms trained on nonpublic data.
The case cited a Reuters report published last week that said McDonald’s pricing engine uses machine-learning algorithms to continuously analyze data from millions of daily transactions across its nearly 14,000 restaurants.
The report also noted that other fast-food companies are increasingly using artificial intelligence for pricing and other operational functions.
McDonald’s rejected the allegations, describing them as speculative and uninformed.
“AI does not set the price of a Big Mac or any other menu item,” the company said in a statement on Monday. McDonald’s said franchisees independently determine their own prices and added that pricing recommendation tools and analytics are widely used across industries.
The lawsuit is part of a broader wave of legal actions in the US involving allegations that companies used algorithms or artificial intelligence to coordinate prices illegally. Similar class actions in recent years have targeted pricing practices involving hotel rooms, apartment rentals and other consumer purchases.
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Lark Turner, an attorney for the plaintiff, accused McDonald’s of using its extensive data and franchise structure to increase prices for consumers.
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The allegations have yet to be proven in court, and the lawsuit seeks to represent consumers nationwide who allegedly paid inflated prices as a result of the company’s pricing practices.
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The case highlights growing scrutiny of the use of AI and algorithmic pricing systems, particularly as businesses increasingly deploy machine-learning tools to analyze large volumes of consumer and market data and make pricing recommendations.