McDonald’s is at the center of a proposed class-action lawsuit alleging the fast-food giant uses an AI-powered pricing system to coordinate menu prices among its independently owned restaurants.
The lawsuit, filed Oct. 2 in federal court in Chicago, accuses McDonald’s of violating U.S. antitrust law by using non-public sales and pricing information from its restaurants to recommend menu prices. The complaint alleges the system allows franchisees, who otherwise set prices independently, to share information through a centralized pricing platform.
The initial plaintiff, Michael Thomas, an Illinois resident and McDonald’s customer, said in the lawsuit that he noticed different prices for the same meal at restaurants near his home in DeKalb. He is seeking
to represent potentially millions of McDonald’s customers nationwide.
McDonald’s has denied the allegations, calling the complaint inaccurate and saying it will vigorously defend itself, according to Reuters. The company maintains that AI does not set menu prices and that franchisees remain responsible for deciding what customers pay.
What the lawsuit alleges
The lawsuit centers on a McDonald’s pricing tool that allegedly uses restaurant data to generate pricing recommendations.
The complaint, obtained by USA TODAY, alleges that the system draws on information from millions of daily transactions and uses that data to recommend prices across thousands of U.S. restaurants. The lawsuit also says the system can consider how much customers are willing to pay and how sensitive they are to price changes.
The complaint argues that sharing this information through a common pricing system can undermine competition because McDonald’s franchisees are independent businesses that are supposed to make their own pricing decisions.
The lawsuit also accuses McDonald’s of pressuring franchisees to use the pricing system and tracking when restaurants do not follow its recommendations.
'AI does not set the price of a Big Mac,' McDonald’s says
McDonald’s disputes the lawsuit's characterization of its pricing system.
“AI does not set the price of a Big Mac or any other menu item,” the company said in a statement, per Reuters. McDonald’s further emphasized that franchisees make their own pricing decisions and that its pricing tools are optional recommendations intended to help restaurants make business decisions.
The company also disputed the notion that some franchisees were pressured to use the AI pricing tools, describing the claims as “speculative and uninformed.”
USA TODAY contacted McDonald's on Oct. 7 for comment.
Why is AI pricing an issue?
A key issue described in the lawsuit is whether competing McDonald’s restaurants can use the same pricing system, which draws on private information from other restaurants, without effectively working together to set prices.
The lawsuit claims McDonald’s pricing system allows the company to use sales and pricing information from its restaurants to recommend prices across its U.S. locations. The plaintiff argues that this could make it easier for independently owned restaurants to charge similar prices, limiting competition and potentially driving up costs for customers.
The case comes as more businesses turn to AI and algorithms to help make pricing decisions. Similar lawsuits have accused companies in industries such as hotels and apartment rentals of using pricing algorithms to coordinate prices. Reuters also reported that other fast-food companies are exploring AI for pricing and other business operations.
What happens next?
Thomas is asking a federal judge to certify the class so other McDonald's customers can join the ongoing litigation. The lawsuit also seeks damages and other relief.
The lawsuit comes after years of scrutiny over McDonald’s prices. In a 2024 fact sheet the lawsuit references, the company said the average price of a McDonald’s menu item increased about 40% between 2019 and 2024.
Contributing: Reuters
Reporter Anthony Thompson can be reached at ajthompson@usatodayco.com or on X @athompsonUSAT
This article originally appeared on USA TODAY: McDonald’s faces lawsuit alleging AI-powered menu price-fixing
