McDonald's is fighting a federal antitrust lawsuit that brands its long-used AI pricing tool as illegal price-fixing aimed at cash-strapped customers, a charge the burger giant flatly rejects.
An Illinois consumer sued the Chicago-based company in federal court, alleging its AI-enhanced pricing platform shares nonpublic store data with franchisees who may compete against each other in the same market.
The complaint, filed Friday on behalf of Michael Thomas of DeKalb, Illinois, claims the system amounts to algorithmic price-fixing and has driven up menu prices at U.S. restaurants. McDonald's answered Tuesday, calling the suit "filled with inaccuracies" and vowing a vigorous defense, according to Associated Press reporting.
Franchisees already own and operate 95% of the company's roughly 14,000 U.S. stores. The company says those independent operators, not an algorithm, set the prices customers actually pay.
Thomas's complaint says McDonald's has for years run an information-sharing pricing platform that pulls data from millions of daily transactions to shape menu prices across thousands of U.S. locations.
"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. It continues:
"The result is algorithmic price-fixing aimed at customers who are already stretched thin."
The filing alleges the AI tool collects details competing franchisees would not normally share, including store-level sales figures. It also claims McDonald's holds "significant leverage over its franchisees" and can pressure them to follow pricing recommendations.
Thomas says he frequently visits McDonald's near his home, orders a Quarter Pounder with cheese, french fries and a Coke, and has noticed price differences from store to store. The suit asks a judge to certify a class action, award damages to the class, and block McDonald's from enforcing agreements that restrict competition.
Customers have already voiced frustration over portions and pricing in other settings, including cases where McDonald's customers accuse the chain of shrinking drink sizes while holding prices steady.
McDonald's rejected the core claim outright. "AI does not set menu prices at McDonald's restaurants, McDonald's franchisees do," the company said. It added that optional tools help owners make decisions for their businesses and customers, but "these tools do not automate, coordinate or fix pricing in any way."
A McDonald's spokesman told the AP the company merely supplies context:
"All we do is provide the context of what's going on."
He added:
"We don't have any way to affect the menu pricing in a restaurant."
The company has used an AI-enhanced pricing tool for more than a decade. Even before that system, it collected data and recommended prices to franchisees. The tools remain optional, and owners do not always follow the guidance.
That independence showed up again on an August investor call. Chairman and CEO Chris Kempczinski said only 60% of U.S. restaurants were offering the company's proposed menu of 10 items for under $3. He reminded investors the company cannot simply impose a national price plan.
"As you know, in our system, that's not something that we just flip the switch on."
Kempczinski said it "requires conversations with franchisees."
Value promotions have struggled to reverse traffic declines even when headquarters pushes them, a pattern also visible when McDonald's $5 meals and $6 combos failed to reverse a U.S. traffic slide.
The Associated Press left a message Tuesday with the National Owners Association, which represents McDonald's franchisees. No response was reported.
Fast-food chains have spent years testing deals aimed at inflation-weary diners, only to learn that cheap deals alone will not bring customers back. McDonald's has also looked beyond traditional soft drinks, including a push into energy beverages, as it tries to steady its beverage business.
Public complaints about sticker shock keep coming. One viral episode saw a customer brand a small Coke "action figure-sized" amid broader shrinkflation backlash. Those frustrations now sit beside a federal antitrust theory that treats optional data tools as coordinated price-fixing.
The lawsuit was filed in Illinois. It does not name a specific court docket or statute in the available reporting, and it offers no quantified price increases tied to the AI system beyond the general claim that the platform raised U.S. prices.
McDonald's, for its part, is experimenting with value strategies in the U.S. and other markets while insisting franchisees remain the final decision-makers on the menu board. The company has also explored new beverage plays, such as when McDonald's bet on Red Bull energy drinks to boost a struggling drink category.
What the record actually shows is a long-running optional recommendation system, independent operators who own nearly all U.S. stores, incomplete adoption of even headquarters' own value menu, and a class-action complaint that equates data sharing with illegal collusion.
If every pricing tool and franchise conversation becomes "algorithmic price-fixing," the courtroom will stay busy long after the drive-thru line moves on.