McDonald’s Lawsuit Over AI Pricing Tool: What the Complaint Alleges

McDonald’s is being sued in federal court over a pricing tool that the complaint says lets independently owned restaurants share nonpublic price and sales data, which the plaintiffs argue violates antitrust law and pushes up menu prices. The company denies the claim and says it will fight the case, according to The Guardian.

The suit, filed on 2 October in Chicago, has been proposed as a nationwide class action. Here are the main questions it raises.

What does the lawsuit allege?

The complaint says McDonald’s built and has for years used its own information-sharing pricing platform. It says the platform draws on data from the chain’s millions of daily transactions to set menu prices across thousands of U.S. restaurants. The filing describes the result as algorithmic price-fixing.

Antitrust law requires businesses to set prices independently of competitors, because coordination can reduce competition and raise costs for consumers. The suit argues that the tool amounts to separate franchise locations exchanging data they would not otherwise share.

Who brought the case?

The plaintiff is Michael Thomas of Illinois, described as a regular McDonald’s customer who is price conscious. He noticed that his usual order, a Quarter Pounder with cheese, fries and a Coke, cost different amounts even within his neighborhood in DeKalb. The Guardian said his attorney did not immediately respond to a request for comment.

How does McDonald’s respond?

A company spokesperson said the complaint is filled with inaccuracies. The spokesperson said AI does not set menu prices at McDonald’s restaurants and that franchisees do. Optional tools are available to owners, the company said, but they do not automate, coordinate or fix pricing.

In a statement on 1 October, the day before the suit was filed, the chain denied using dynamic pricing. It described its tool as providing information that franchisees may choose whether to adopt.

What else has been reported about the tool?

A recent Reuters investigation reported that the company pressured some franchise owners to use the AI pricing tools and to record when they departed from the tool’s recommendations. McDonald’s disputed that account, calling the reporting “speculative and uninformed.”

McDonald’s bought an AI company, Dynamic Yield, in 2019. In 2023, an $18 Big Mac meal at a Connecticut restaurant drew viral attention. The franchise owner there filed a suit alleging that the AI pricing tool suggested that price, according to The Guardian.

Why does it matter for customers?

Most McDonald’s restaurants in the U.S. are independently owned and are said to set their own prices under company policy. If the court were to find that shared data amounted to coordination, it could affect how menu prices are set. That has not been decided, and the case is at an early stage.

Customers interviewed by The Guardian described uneven prices. Chukwama Okeke, 43, said a value meal costs about $15 at a Manhattan financial district location and closer to $9 in Brooklyn’s Crown Heights. He said busier areas tend to have higher prices. Beatriz Milander, 27, said she had not seen a big difference between neighborhoods, but that prices had inched up and that more deals had appeared recently.

According to a fact sheet McDonald’s published in 2024, the average price of a menu item rose about 40% between 2019 and 2024.

Is this part of a wider issue?

Experts quoted by The Guardian say AI-driven pricing could worsen the affordability crisis. Lindsay Owens, head of the left-leaning Groundwork Collaborative and the author of a recent book on the topic, said at least 90 pieces of legislation have been filed across the country this year to counter algorithmic price-fixing.

Source: The Guardian