A lawsuit filed in federal court in Chicago on 2 October alleges that McDonald's deployed an artificial intelligence-based pricing platform that draws on data from millions of daily transactions to set menu prices across thousands of US restaurants. The complaint, brought by Illinois resident Michael Thomas, argues that the tool amounts to illegal price-fixing because it enables independently owned franchise locations to exchange nonpublic price and sales data.
According to the complaint, "This case is about McDonald's bringing 'optimization' to America's largest fast food chain." It adds that the result is "algorithmic price-fixing aimed at customers who are already stretched thin."
A McDonald's spokesperson rejected the claims, saying "the complaint is filled with inaccuracies and we will vigorously defend against this lawsuit." The spokesperson said, "AI does not set menu prices at McDonald's restaurants – McDonald's franchisees do. Optional tools are available to franchisees to help them make the best decisions for their businesses and customers, but these tools do not automate, coordinate or fix pricing in any way."
The lawsuit comes after a Reuters investigation reported that some franchise owners have been pressured to use the AI pricing tools and to record deviations from the tool's recommendations. McDonald's disputed that reporting as "speculative and uninformed."
The proposed class action seeks to represent customers nationwide. Thomas, described as "price conscious," noticed that his usual order – a Quarter Pounder with cheese, fries, and a Coke – varied in price even within his neighborhood in DeKalb, Illinois.
Other customers reported similar disparities. Chukwama Okeke, 43, said he pays about $15 for a value meal in Manhattan's financial district, while the same meal costs closer to $9 at a McDonald's in Brooklyn's Crown Heights neighborhood. Beatriz Milander, 27, ordered a snack wrap, small fries, and iced coffee for $11.51 and said she hadn't noticed significant differences across locations.