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McDonald’s sued for allegedly using AI tool to determine pricing for franchises
Suit says AI tool allows independently owned franchises to exchange nonpublic price and sales information
McDonaldâs is facing a lawsuit in federal court over its alleged use of an AI tool to determine pricing across independent franchises, which prosecutors say violates antitrust laws and has unfairly inflated menu prices for Americans.
The vast majority of McDonaldâs US stores are independently owned and are said to individually decide on prices under company policy. Antitrust laws require businesses to set prices independently from their competitors, as coordinating prices can stifle market competition and push up costs for consumers.
The lawsuit, filed on 2 October in a federal Chicago courtroom, alleges that McDonaldâs AI tool is illegal because it amounts to independent franchise locations exchanging nonpublic price and sales data.
McDonald’s hit with lawsuit alleging AI-powered menu price-fixing
The lawsuit said McDonaldâs violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on non public data. Photo: Supplied
McDonaldâs 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 McDonaldâs violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on non public data.
Reuters reported last week that McDonaldâs pricing engine uses machine-learning algorithms to continually analyse data from millions of daily transactions across its nearly 14,000 restaurants.
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