A lawsuit against McDonald’s from a regular customer in Illinois now threatens to balloon into a class action suit over allegations of AI-determined pricing, which is illegal under U.S. antitrust laws, reports The Guardian.
The case is just the latest in an ongoing battle between major retailers and customers over artificial intelligence data being used to adjust prices on car rides, fast food and many other goods and services.
The lawsuit, brought in federal court October 2 by Michael Thomas, a McDonald’s regular described as “price conscious,” came after Thomas found that the cost of his usual order — a Quarter Pounder with cheese, fries and a Coke — varied even within his neighborhood in DeKalb, Illinois. Prosecutors say the use of AI to set prices violates antitrust laws because it amounts to independent franchise locations exchanging nonpublic price and sales data, and has unfairly inflated menu prices for Americans.
While the vast majority of McDonald’s U.S. stores are independently owned and free to individually decide on prices, a recent Reuters investigation reported that some McDonald’s franchise owners say they have been pressured by the company to use the AI pricing tools and record their deviations from the tool’s recommendations.
McDonald’s denies the allegations, saying, “AI does not set menu prices at McDonald’s restaurants — McDonald’s franchisees do,” and that the Reuters report is “speculative and uninformed.”
Meanwhile, Walmart became the latest major retailer to pledge avoiding using AI to set prices illegally, according to Fox News. In a public letter released on October 5, Dan Bartlett, Walmart's executive vice president of corporate affairs, said "The facts are straightforward. We price products, not people." The letter was directly addressed to Lindsay Owens, author of the recently released book "Gouged," that argues Walmart and other major corporations use surveillance pricing, algorithmic price-fixing, and other high-tech forms of price gouging, thereby “gutting the American economy and your wallet.”
