McDonald’s hit with lawsuit alleging AI-powered menu price-fixing
Reuters reported that McDonald’s pricing engine uses machine-learning algorithms to continually analyze data from millions of daily transactions across its…
Somewhere in America, a lawyer filed a lawsuit that essentially says McDonald’s is too good at knowing what people will pay. The company’s pricing engine uses machine learning to crunch millions of daily transactions across nearly 14,000 restaurants. That data tells a franchise owner whether to nudge the price of a Big Mac up or down.
Commentary is separate from the original publisher's reporting.
McDonald’s has been sued in federal court in Chicago in a proposed nationwide class action alleging the fast-food company illegally coordinates menu prices across its franchises and company-owned restaurants through an AI-powered pricing system.
The lawsuit, filed on Friday, said McDonald’s violated US antitrust law by conspiring with independent franchisees to fix prices using algorithms trained on nonpublic data.
Reuters reported last week that McDonald’s pricing engine uses machine-learning algorithms to continually analyze data from millions of daily transactions across its nearly 14,000 restaurants.
The lawsuit cited the Reuters article, which said other fast-food companies are also turning to AI to help with pricing and other operations.
“Independent businesses must set their prices independently,” the lawsuit said.
McDonald’s, in a statement on Monday, called the allegations speculative and uninformed.
“AI does not set the price of a Big Mac or any other menu item,” the company said. It said franchisees make their own pricing decisions, and that the use of pricing recommendation tools and analytics is widespread across industries.
US plaintiffs have filed a wave of class actions in recent years alleging that companies used algorithms or AI to illegally coordinate prices for hotel rooms, apartment rentals and other purchases.
Lark Turner, a lawyer for the plaintiff, said in a statement, that McDonald’s is “leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry.”
The plaintiff, an Illinois resident, is seeking to represent a class of potentially millions of McDonald’s customers, the lawsuit said.
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Somewhere in America, a lawyer filed a lawsuit that essentially says McDonald’s is too good at knowing what people will pay. The company’s pricing engine uses machine learning to crunch millions of daily transactions across nearly 14,000 restaurants. That data tells a franchise owner whether to nudge the price of a Big Mac up or down. The lawsuit calls this price-fixing. Here’s the thing: price-fixing is when competitors secretly agree to collude. McDonald’s didn’t call Burger King. It just noticed that a Filet-O-Fish sells better at lunch than at 2 a.m. That’s not a conspiracy, that’s commerce.
The left has a new bogeyman, and it’s an algorithm they don’t understand. If this lawsuit succeeds, the only safe way to price a Happy Meal is to ignore all customer data and hope for the best. That would make prices higher, not lower, and it would make every drive-thru a little dumber. We’re supposed to believe the same people who rage about inflation want to stop businesses from using the best available information to set prices. You can’t have it both ways. If you want cheap burgers, let the machines help.
The real scandal here is that we’re even having this conversation. McDonald’s is a business, and businesses exist to serve customers and make a profit. Using data to figure out what people will pay is the most American thing there is. The next time you hear a politician claim they’re fighting for the little guy, remember this lawsuit. They’re fighting for the power to control your lunch. That’s not consumer protection. It’s just control.
Commentary written with AI assistance by the New Republican Times Editorial Board.