McDonald’s has been sued in federal court over allegations that it deployed an artificial intelligence system to coordinate pricing decisions across its independently-owned franchise locations throughout the United States. The lawsuit, filed on 2 October in Chicago, contends that the practice constitutes illegal price coordination that harms consumers and violates antitrust regulations requiring competitors to make independent pricing decisions.
According to the complaint, McDonald’s developed and operated a pricing platform that analyzes transaction data from millions of daily operations to establish menu prices across thousands of U.S. restaurants. The plaintiff, an Illinois consumer named Michael Thomas, brought the case as a proposed nationwide class action, noting significant price variations for identical menu items across locations in his neighborhood. The lawsuit characterizes the arrangement as “algorithmic price-fixing” designed to benefit the corporation at the expense of price-conscious customers.
McDonald’s has denied the allegations, stating that franchisees independently determine their own menu prices and that the company merely offers optional analytical tools to assist franchise owners in business decision-making. The corporation asserted that the AI system does not automate, coordinate, or dictate pricing. A recent investigation by Reuters suggested that some franchise owners faced pressure to use the pricing tools and report deviations from their recommendations, though McDonald’s disputed this characterization.
Anecdotal evidence from consumers in different geographic areas shows price disparities for the same items, with Manhattan locations commanding significantly higher prices than Brooklyn counterparts. McDonald’s acquired Dynamic Yield, an AI company, in 2019, though the chain has consistently maintained it does not employ AI for price-setting. Company data released in 2024 indicated that average menu prices rose approximately 40% between 2019 and 2024. Lawmakers have taken increasing interest in algorithmic pricing practices, with at least 90 pieces of state legislation introduced so far this year to address such concerns.
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