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McDonald's AI accused of price fixing
7 Oct
Summary
- AI-powered pricing allegedly used to coordinate prices.
- Lawsuit claims McDonald's uses nonpublic data.
- Company states AI makes recommendations, not direct price changes.
A recent nationwide class action lawsuit filed in federal court in Chicago alleges that McDonald's (MCD) has been using artificial intelligence to coordinate prices across its independently operated restaurants. The suit claims the company utilized AI-powered pricing and nonpublic data, raising questions about the true independence of pricing decisions for popular items.
McDonald's has responded by stating that its AI system makes recommendations and does not directly change restaurant prices, emphasizing that franchisees ultimately decide menu item pricing based on local business conditions. The company states that about 95% of its global restaurants are franchised.
This legal dispute follows a Reuters investigation into McDonald's pricing technology, which reportedly uses machine-learning algorithms to analyze millions of daily transactions from nearly 14,000 U.S. eateries. The system may incorporate local market data to suggest prices, potentially impacting restaurant sales and franchisee profitability.
