NewsMcDonald's sued in federal court over AI menu price-fixing
McDonald's faces a new federal class action lawsuit in Chicago. The case claims artificial intelligence illegally coordinates prices across nearly 14,000 restaurants. McDonald's calls the allegations speculative and says franchisees set their own prices.
Your local quick lunch run might be getting caught up in a high-tech legal battle. McDonald's Corporation, the global fast-food giant based in Chicago, Illinois, has just been hit with a proposed nationwide class action lawsuit in federal court. The court filing on Oct. 2 claims the company is illegally coordinating menu prices across its nearly 14,000 restaurants nationwide through an artificial intelligence-powered pricing system. According to the lawsuit, McDonald's violated United States antitrust law by using machine-learning algorithms trained on nonpublic data to fix prices alongside independent franchisees. Reuters reported that the pricing engine constantly analyzes data from millions of daily transactions. Other fast-food companies are also turning to AI for their operations, but this lawsuit aims to stop the trend. Independent businesses must set their prices independently, the lawsuit argues. Lark Turner, a lawyer representing the Illinois resident who filed the case, stated that McDonald's is leveraging its massive troves of data and franchised system to nickel-and-dime consumers down to the last French fry. The plaintiff wants to represent a class of potentially millions of customers who paid for these meals. On the other side, McDonald's issued a statement on Monday calling the allegations speculative and uninformed. The company stated that artificial intelligence does not set the price of a Big Mac or any other menu item, and that franchisees make their own pricing decisions while using widespread analytics tools. US plaintiffs have filed a wave of similar class actions in recent years targeting algorithms used for hotel rooms and apartment rentals. Here is what this means for you: if the lawsuit succeeds, it could force fast-food giants to change how digital menu boards and app deals are priced, potentially lowering what you pay for a quick road-trip stop. At least you do not need a computer science degree to know when a burger costs too much. The court will now decide if the case moves forward.