OAK BROOK (dpa-AFX) - McDonald's (MCD) has been sued in federal court in Chicago in a proposed nationwide class action accusing the fast-food chain of illegally coordinating menu prices across its franchised and company-owned restaurants through an AI-powered pricing system.
The lawsuit alleges McDonald's conspired with independent franchisees to fix prices using algorithms trained on nonpublic data, potentially affecting millions of customers.
The lawsuit follows a Reuters report that McDonald's uses machine-learning technology to analyse millions of daily transactions across its nearly 14,000 restaurants and provide pricing recommendations.
The system considers factors including local demand, operating costs and competition. The plaintiff's attorney accused McDonald's of using its data and franchise network to raise prices.
McDonald's denied the allegations, calling them speculative and uninformed. The company said AI does not set the price of a Big Mac or any other menu item, and that franchisees make their own pricing decisions.
It also said recommendations are not mandatory and denied using dynamic pricing or setting prices based on individual customers' willingness to pay.
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