McDonald’s sued over AI tool that recommends prices to US franchisees
McDonald’s is facing a federal lawsuit that alleges its AI-enhanced pricing tool violates antitrust laws because it shares nonpublic data with franchisees who might be competing in the same market.
McDonald's is facing a federal lawsuit alleging its AI-enhanced pricing tool violates antitrust laws by sharing nonpublic data with franchisees. Filed in Illinois, the lawsuit claims McDonald's uses artificial intelligence to collect store-level sales data that competing franchises wouldn't normally share. The burger giant argues the tool helps franchisees set prices at individual restaurants, but the lawsuit contends it leads to algorithmic price-fixing, raising U.S. prices for customers already struggling.
McDonald's refutes the allegations, stating franchisees set prices themselves and the tool is merely an optional aid. Filed on behalf of consumer Michael Thomas, the lawsuit alleges Thomas noticed price discrepancies between McDonald's stores near his home. McDonald's has used AI-enhanced pricing for over a decade, determining optimal prices based on stores' sales, location, and competitors' prices.
The lawsuit alleges McDonald's has significant leverage over franchisees, who own 95% of its 14,000 U.S. restaurants, and can pressure them to follow pricing recommendations. The lawsuit seeks to certify it as a class action and prevent McDonald's from enforcing anti-competitive agreements.
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