McDonald’s is facing a federal lawsuit alleging that it has employed an artificial intelligence (AI) tool to coordinate pricing across its independently owned U.S. franchises, a practice prosecutors say violates antitrust laws and has contributed to inflated menu prices nationwide. The case was filed on October 2 in a federal court in Chicago.
Most McDonald’s restaurants in the United States are operated by independent franchisees who, under company policy, are responsible for setting their own prices. U.S. antitrust laws require that businesses establish prices independently to prevent collusion that can reduce competition and drive up costs for consumers. The lawsuit contends that McDonald’s use of an AI-driven pricing platform effectively enables franchise locations to share nonpublic pricing and sales information, amounting to illegal price-fixing.
The complaint describes the company’s system as an “information-sharing pricing platform” that aggregates data from millions of daily transactions to optimize menu prices across thousands of restaurants. It alleges this algorithmic coordination unfairly impacts consumers, especially those facing financial constraints.
In response, McDonald’s denied the allegations, stating the lawsuit contains “inaccuracies” and pledging to “vigorously defend” itself. A corporate spokesperson emphasized that AI does not set menu prices, asserting that franchisees retain full control over pricing decisions. The company acknowledged offering optional tools to assist franchisees but maintained these do not automate or coordinate pricing.
A recent investigation reported that some franchisees have been pressured to use the AI pricing tools and to record any deviations from its recommendations. McDonald’s disputed this portrayal, calling it “speculative and uninformed.”
The lawsuit, proposed as a nationwide class action, was initiated by Michael Thomas, an Illinois resident who noticed inconsistent pricing for his regular order—a Quarter Pounder with cheese, fries, and a Coke—within his hometown of DeKalb. Legal representatives for Thomas did not immediately respond to requests for comment.
Customers interviewed in other regions have reported similar pricing disparities. Chukwama Okeke, a resident of Manhattan’s financial district, recounted paying approximately $15 for a value meal consisting of a mango-pineapple smoothie and sides, compared to about $9 for the same meal in Brooklyn’s Crown Heights neighborhood. Okeke attributed higher prices in certain locations to increased foot traffic. Another customer, Beatriz Milander of the Bronx, noted price increases over recent months but also observed more frequent deals and lower-priced options.
Industry observers caution that the use of AI for setting or adjusting prices could exacerbate affordability challenges for many Americans. Lindsay Owens, head of the think tank Groundwork Collaborative, noted that over 90 legislative initiatives addressing algorithmic price-fixing have been introduced nationwide this year. Owens recently published a book examining the broader impact of AI-driven pricing on consumers.
McDonald’s acquired the AI company Dynamic Yield in 2019 but has consistently denied employing dynamic pricing practices. Ahead of the lawsuit, the company reiterated that its pricing tools are informational and voluntary for franchisees’ use.
The fast-food giant has faced heightened scrutiny over rising menu prices, with a notable incident last year involving an $18 Big Mac meal at a Connecticut franchise. That franchise’s owner later filed a separate lawsuit claiming the AI tool suggested the high price.
According to company data released in 2024, average menu prices at McDonald’s increased by approximately 40% between 2019 and 2024.