McDonald’s sued over AI-powered pricing across franchises and restaurants

  • McDonald’s faces a Chicago lawsuit alleging algorithmic price coordination among franchises and company restaurants.
  • Nearly 14,000 restaurants generate data analyzed by McDonald’s pricing engine, Reuters reported last week.
  • McDonald’s said Oct. 5 that AI does not set menu prices and franchisees decide independently.

McDonald’s faces a proposed nationwide class action in federal court in Chicago alleging that it illegally coordinated menu prices across franchises and company-owned restaurants through an AI-powered pricing system. The lawsuit, filed on Oct. 2, claims the company 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 nearly 14,000 restaurants. McDonald’s said in an Oct. 5 statement that the allegations were speculative and uninformed, that AI does not set menu prices and that franchisees make their own pricing decisions. The case is part of a recent wave of US class actions alleging that algorithms or AI were used to coordinate prices for hotel rooms, apartment rentals and other purchases. The Illinois plaintiff is seeking to represent potentially millions of McDonald’s customers.

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