McDonald's sued in US over alleged AI price manipulation

McDonald's has been hit with a proposed nationwide class-action lawsuit filed in Chicago Federal Court. Plaintiffs accuse the fast-food giant of using an artificial intelligence pricing system to illegally coordinate menu prices across its franchised and company-owned restaurants.

The lawsuit, filed Friday, alleges that McDonald's and its independent franchisees conspired to use algorithms trained on non-public data to manipulate prices, in violation of U.S. antitrust laws. Plaintiffs cite a Reuters report detailing how McDonald's pricing engine uses machine learning to analyze millions of daily transactions from its nearly 14,000 locations.

McDonald's has denied the allegations, stating in a release that "the price of a Big Mac or any other menu item is not determined by AI." The company asserted that individual franchisees set their own prices and that pricing recommendation tools and data analysis are common industry practices.

"Independent merchants must set their own prices," the lawsuit states. The plaintiffs, Illinois residents, seek to represent potentially millions of McDonald's customers. The case is among several recent class-action lawsuits in the U.S. accusing companies of using algorithms or AI for illegal price coordination on consumer goods and services.