McDonald’s is at the center of a proposed class-action lawsuit alleging the fast-food giant uses an AI-powered pricing system to coordinate menu prices among its independently owned restaurants.
The lawsuit, filed Oct. 2 in federal court in Chicago, accuses McDonald’s of violating U.S. antitrust law by using nonpublic sales and pricing information from its restaurants to recommend menu prices. The complaint alleges the system lets franchisees, who otherwise set prices independently, share information through a centralized pricing platform.
The initial plaintiff, Michael Thomas, an Illinois resident and McDonald’s customer, said he noticed different prices for the same meal at restaurants near his home in DeKalb. He is seeking to represent potentially millions of McDonald’s customers nationwide.
McDonald’s has denied the allegations, calling the complaint inaccurate and saying it will vigorously defend itself, according to Reuters. The company says AI does not set menu prices and franchisees remain responsible for deciding what customers pay.
What the Lawsuit Alleges
The lawsuit centers on a McDonald’s pricing tool that allegedly uses restaurant data to generate pricing recommendations. The complaint, obtained by USA TODAY, says the system draws on information from millions of daily transactions and recommends prices across thousands of U.S. restaurants. It also alleges the system can consider how much customers are willing to pay and how sensitive they are to price changes.
The complaint argues that sharing this information through a common pricing system can undermine competition because McDonald’s franchisees are independent businesses expected to make their own pricing decisions. It also accuses McDonald’s of pressuring franchisees to use the system and tracking when restaurants do not follow its recommendations.
McDonald’s Says Franchisees Set Their Own Prices
“AI does not set the price of a Big Mac or any other menu item,” the company said in a statement, according to Reuters. McDonald’s says its pricing tools offer optional recommendations to help restaurants make business decisions. The company also disputed the allegation that franchisees were pressured to use them, calling the claims “speculative and uninformed.”
USA TODAY contacted McDonald’s for comment on Oct. 7.
Why AI Pricing Is an Issue
A key question is whether competing restaurants can use the same pricing system, drawing on information from other restaurants, without effectively working together to set prices. The plaintiff argues the system could make it easier for independently owned restaurants to charge similar prices, limiting competition and potentially raising costs for customers.
The case comes as more businesses turn to algorithms to help make pricing decisions. Similar lawsuits have accused companies in industries such as hotels and apartment rentals of using pricing algorithms to coordinate prices. Reuters has also reported that other fast-food companies are exploring AI for pricing and other operations.
The lawsuit references a 2024 McDonald’s fact sheet saying the average price of a menu item increased about 40% between 2019 and 2024.
What Happens Next?
Thomas is asking a federal judge to certify the class so other McDonald’s customers can join the litigation. The lawsuit also seeks damages and other relief. The allegations have not been proven in court, and McDonald’s disputes the complaint’s characterization of its pricing practices.
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