Key Takeaways
- McDonald’s says franchisees independently set menu prices and insists that “AI does not set the price of a Big Mac or any other menu item.”
- A proposed nationwide class action alleges the company violated antitrust law by using private transaction data from roughly 14,000 U.S. restaurants to generate AI-powered pricing recommendations that weaken competition among franchises.
- The lawsuit follows an investigation into McDonald’s pricing system as the chain also prepares to test Archy, an AI drive-thru ordering assistant.
McDonald's is facing a proposed nationwide class action accusing the fast-food giant of using AI-powered technology and data from thousands of restaurants to coordinate menu prices, potentially putting millions of customers at the center of a new antitrust fight over algorithmic pricing.
According to Reuters, the lawsuit, filed in federal court in Chicago, claims McDonald's violated federal antitrust law by feeding nonpublic transaction data from roughly 14,000 U.S. restaurants into a centralized machine-learning system that generates pricing recommendations.
McDonald's franchisees traditionally retain control over what they charge, and McDonald's insists that hasn't changed. But the lawsuit alleges that since 2019, the company's pricing technology has effectively given those operators access to recommendations built from information they wouldn't otherwise have about competing locations.
Attorney Lark Turner, who represents the plaintiff, accused McDonald's of "leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry."
McDonald's pushed back forcefully. "AI does not set the price of a Big Mac or any other menu item," the company said, adding that franchisees set prices independently and aren't required to follow its recommendations.
McDonald's also argued that businesses routinely use analytics and pricing software to guide decisions.
The lawsuit cited a recent Reuters investigation into the company's pricing system, which reportedly factors in regional purchasing behavior and consumers’ sensitivity to price increases.
That doesn't mean every McDonald's charges the same amount. Reuters found a Big Mac priced at $5.69 at one corporate-owned restaurant in Fresno, California, and $6.89 at another roughly two miles away. The investigation did not establish that McDonald's pricing technology caused the gap.
The fight comes as AI becomes more visible across the fast-food industry. McDonald's is testing "Archy," an AI voice system designed to take drive-thru orders in English and Spanish, while Wendy's has been deploying its Google Cloud-developed FreshAi technology.
