The Pulse
McDonald’s Faces Antitrust Suit Over AI Pricing Recommendations
A proposed federal class action accuses McDonald’s of using an AI-enhanced pricing tool to share sensitive sales data among franchisees and weaken price competition. McDonald’s says franchisees set their own prices and its optional tools do
AI.info Team · Written with AI ·
Michael Thomas says he noticed different prices at McDonald’s restaurants near his home in DeKalb, Illinois. On October 2, he filed a proposed class-action lawsuit in federal court, alleging the company’s AI-enhanced pricing system helps franchisees coordinate menu prices by sharing confidential sales information. The complaint seeks damages for consumers and an order barring McDonald’s from enforcing agreements that restrict competition.
The case turns on what franchisees share
The lawsuit alleges McDonald’s platform draws on information from transactions across its U.S. restaurants, including store-level sales data that competing businesses would not ordinarily exchange. The system uses artificial intelligence to recommend menu prices, according to the complaint as described by the Associated Press. The plaintiff argues that pooling those inputs can reduce the independent pricing decisions that competition among nearby restaurants would otherwise produce.
Thomas’s complaint also links the system to higher U.S. menu prices. It describes McDonald’s as having “built and for years deployed its own information-sharing pricing platform, which draws on data from its millions of daily transactions to set menu prices across thousands of U.S. restaurants,” before alleging that the result is “algorithmic price-fixing.” Those are claims in a lawsuit, not findings by a court.
McDonald’s says owners choose the prices
McDonald’s rejected the allegations and said it would defend itself. In a statement reported by the AP, the company said: “AI does not set menu prices at McDonald’s restaurants – McDonald’s franchisees do.” It added that its optional tools do not “automate, coordinate or fix pricing in any way.”
The company says it has used an AI-enhanced pricing tool for more than a decade. The program recommends prices using factors including a restaurant’s sales, location and competitors’ prices, while franchisees remain responsible for setting prices at their own locations. Franchisees own and operate 95% of McDonald’s roughly 14,000 U.S. restaurants, the AP reported.
Franchisee independence is already visible in pricing
The dispute arrives amid McDonald’s efforts to promote lower-cost menu options as it tries to win back customers. Franchise operators have not uniformly adopted those offers: during an August investor call, Chairman and CEO Chris Kempczinski said 60% of U.S. restaurants were offering the company’s proposed menu of 10 items priced below $3.
“As you know, in our system, that’s not something that we just flip the switch on,” Kempczinski said, referring to the need for conversations with franchisees. The remark reflects the company’s account of how its franchise system works; the lawsuit argues that McDonald’s has significant influence over operators and can pressure them to follow pricing recommendations.
A proposed class action, not a ruling
The case, Thomas v. McDonalds USA, LLC, was filed in the U.S. District Court for the Northern District of Illinois under federal antitrust law. The docket identifies Thomas as the plaintiff and McDonald’s USA and McDonald’s Corporation as defendants. Thomas asks the court to certify a nationwide class and award damages, as well as prevent enforcement of agreements he says limit competition.
The central dispute is whether a tool McDonald’s describes as optional pricing guidance amounts, in practice, to coordination among competing restaurants. The suit has not established that the system fixed prices or caused menu prices to rise. McDonald’s denies that its tool sets or coordinates prices, while the complaint asks the court to decide whether the information-sharing and pressure it describes violate antitrust law.