McDonald's sued for allegedly using AI tool to determine pricing for franchises
3 hours ago
- McDonald's is facing a federal lawsuit over its AI pricing tool, which prosecutors claim violates antitrust laws by enabling independent franchises to share nonpublic pricing data.
- The lawsuit argues that the AI tool amounts to illegal price coordination, inflating menu prices for consumers.
- McDonald's denies the allegations, stating that franchisees independently set prices and that the AI tool is optional and does not automate or fix pricing.
- Consumer reports show significant price variations for the same items at different McDonald's locations, such as a $15 meal in Manhattan versus $9 in Brooklyn.
- Experts warn that AI-driven pricing could worsen the affordability crisis, with over 90 pieces of legislation filed in the U.S. to combat algorithmic price-fixing.
- McDonald's acquired AI company Dynamic Yield in 2019 but insists it does not use AI for pricing; menu prices have risen about 40% from 2019 to 2024.