McDonald's sued over alleged use of AI tool to price franchise locations

McDonald's was sued in Chicago federal court, accused of using an AI pricing tool to exchange non-public price and sales data among independent franchisees, constituting algorithmic price collusion and driving up menu prices; the case is proposed as a nationwide class action. The complaint states the platform sets menu prices for thousands of U.S. locations based on millions of daily transaction data points; the plaintiff is a regular customer in Illinois whose frequently ordered combo meal was priced differently at nearby locations. McDonald's responded that AI does not set store prices, pricing is determined by franchisees, the tool in question is optional and does not automate, coordinate, or fix prices, and said the complaint is full of inaccuracies and that it will vigorously defend itself. A previous Reuters investigation reported that some franchisees were pressured to use the tool and recorded deviations from recommendations; McDonald's called that report speculative. The reporting also mentioned that at least 90 pieces of legislation on algorithmic pricing have been introduced nationwide this year, and data McDonald's released in 2024 showed its average menu item price rose about 40% between 2019 and 2024.