McDonald's Faces Class-Action Lawsuit Over AI-Powered Pricing System

McDonald's is facing a proposed nationwide class-action lawsuit in federal court in Chicago, accused of illegally coordinating menu prices across its restaurants through an artificial intelligence-powered pricing system. The lawsuit, filed Friday, claims the fast-food company violated U.S. antitrust law by conspiring with independent franchisees to fix prices using algorithms that analyze nonpublic data.

According to a Reuters report, McDonald's pricing engine utilizes machine-learning algorithms to continuously analyze data from millions of daily transactions across its nearly 14,000 locations. The lawsuit cites this report, noting that other fast-food companies are also exploring AI for pricing and operational strategies.

"Independent businesses must set their prices independently," the lawsuit states.

In response, McDonald's issued a statement Monday calling the allegations speculative and uninformed. "AI does not set the price of a Big Mac or any other menu item," the company said, adding that franchisees are responsible for their own pricing decisions. The company also noted that the use of pricing recommendation tools and analytics is common across various industries.

This lawsuit is part of a recent trend of class-action filings in the U.S. where plaintiffs allege that companies have used algorithms or AI to unlawfully coordinate prices for goods and services, including hotel rooms and apartment rentals.

Lark Turner, a lawyer for the plaintiff, stated that McDonald's is "leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry." The plaintiff, an Illinois resident, is seeking to represent a class potentially comprising millions of McDonald's customers.