McDonald’s is facing a federal lawsuit that alleges its AI-enhanced pricing tool violates antitrust laws because it shares nonpublic data with franchisees who might be competing in the same market.
The lawsuit, which was filed Friday in Illinois, said McDonald’s pricing tool uses artificial intelligence to collect data that competing franchises wouldn’t normally share, like store-level sales. The Chicago-based burger giant has said it makes the tool available to U.S. franchisees to help them set prices at their individual restaurants.
The lawsuit also blames the pricing system for raising McDonald’s U.S. prices.
“McDonald’s has built and for years deployed its own information-sharing pricing platform, which draws on data from its millions of daily transactions to set menu prices across thousands of U.S. restaurants,” the lawsuit states. “The result is algorithmic price-fixing aimed at customers who are already stretched thin.”
Another case against surveillance pricing (or at least surveillance pricing-adjacent), which has already had state-level bans passed against it in 4 states just this year, with likely many more to come. It’s why you’re seeing a speedrunning of the worst aspects of this process as companies race to normalize it before the law catches up. (Like the cameras and cart sensors Walmart uses, for instance.)
Donald’s FTC, on the other hand, renamed the practice ‘personalized pricing’ and has done nothing meaningful to stop it, as expected. They are supposedly doing a policy review on it, but I’ll believe that when I actually see them produce something.