McDonald's hit with class action alleging AI-powered menu price-fixing

McDonald's has been ​sued in federal court in Chicago in a proposed nationwide class action alleging the fast-food company illegally coordinates menu prices across its franchises and company-owned restaurants through an AI-powered pricing system.

 

The lawsuit, filed on Friday, said ‌McDonald's violated US antitrust law by ​conspiring with independent franchisees ​to fix prices using algorithms trained on nonpublic data.

 

Reuters reported ​last week that McDonald's pricing engine uses machine-learning algorithms to continually analyze data from millions of daily transactions across its nearly 14,000 restaurants.

 

The lawsuit cited the Reuters article, which said other fast-food companies ​are also turning to AI to help with pricing and other ‌operations.

 

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

 

McDonald's, ​in a statement on Monday, called the allegations speculative and uninformed.

 

"AI does not set the price of a Big Mac or any other ‌menu item," the company said. ​It said franchisees make their ‌own pricing decisions, and that the use of pricing recommendation tools ‌and analytics is widespread across industries.

 

US plaintiffs have filed a ​wave of class actions in recent years alleging that companies used algorithms or AI to illegally coordinate prices ​for hotel rooms, apartment rentals and other purchases.

 

Lark Turner, a lawyer for the plaintiff, said in a statement, ‌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 of potentially millions of McDonald's customers, the lawsuit said.