Lawsuit alleges McDonald’s used AI-recommended prices to coordinate franchise pricing

A proposed class-action antitrust lawsuit alleges that McDonald’s and its US franchisees coordinated menu prices using recommendations from an AI system. McDonald’s disputes the claims.

According to Reuters, the company uses an algorithm at roughly 14,000 US restaurants to recommend prices for individual menu items. The system considers factors including local purchasing behavior and estimates of what consumers may be willing to pay in different locations.

The lawsuit alleges that McDonald’s and its franchisees engaged in unlawful price coordination dating back to 2019. It seeks damages for potentially millions of consumers. The case is at an early stage.

McDonald’s says AI does not set the price of a Big Mac or any other menu item, and that franchisees can set their own prices. The company also says AI-based price recommendations are used in multiple industries.

Lark Turner, a lawyer for the plaintiffs, said McDonald’s was “leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry,” according to the report. The lawsuit argues that the chain’s central role in recommending prices raises questions about where its control ends and franchisees’ pricing decisions begin.