McDonald’s hit with class action over alleged AI menu price fixing
McDonald’s is facing a proposed nationwide class action in the US over claims it used an AI-powered system to unlawfully coordinate menu prices across its restaurants.
The lawsuit, filed in federal court in Chicago, alleges the fast-food giant violated US antitrust law by working with independent franchisees to fix prices using algorithms trained on non-public data.
McDonald’s has rejected the allegations, describing them as “speculative and uninformed” and insisting that franchisees retain control over the prices they charge customers.
The company said: “AI does not set the price of a Big Mac or any other menu item,” adding that pricing recommendation tools and analytics are widely used across different industries.
The case follows scrutiny of McDonald’s use of artificial intelligence to help guide menu pricing across its US estate.
Its pricing system uses machine-learning technology to analyse data from millions of daily transactions across nearly 14,000 restaurants before generating recommended prices for individual menu items at each location.
The technology can take into account factors such as local demand and customers’ willingness to pay, although McDonald’s maintains that the recommendations are optional and individual franchisees are free to set their own prices.
Reuters previously reported that the system had contributed to wider differences in menu prices between some restaurants, including locations just a few miles apart, according to franchisees familiar with the technology.
The new lawsuit argues that independently owned McDonald’s restaurants should be making pricing decisions separately and alleges the use of shared data and algorithms amounts to unlawful coordination.
The plaintiff, an Illinois resident, is seeking to represent potentially millions of McDonald’s customers across the US.
The case comes as the use of AI and algorithmic pricing attracts growing scrutiny from regulators and consumers.
Businesses across foodservice, hospitality and other sectors are increasingly adopting technology to analyse demand and recommend prices, while US courts have faced a series of legal challenges claiming algorithms have been used to coordinate pricing between businesses.
McDonald’s has maintained that its pricing platform is designed to help restaurant operators make informed decisions and deliver value to customers rather than dictate the prices ultimately charged.
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