A new antitrust lawsuit against McDonald’s is raising questions about whether artificial intelligence is being used to influence prices across its vast US restaurant network, potentially putting millions of customers at the centre of a growing legal battle over algorithmic pricing.
Filed in a federal court in Chicago, the proposed class action alleges that McDonald’s uses AI-powered pricing technology to push franchise owners towards higher menu prices. The complaint argues that restaurant operators face pressure to follow recommendations generated by the company’s pricing system, despite most outlets being independently owned.
McDonald’s has rejected the allegations, maintaining that franchisees determine their own prices. The company says its technology does not automatically set the price of a Big Mac or any other menu item.
The dispute comes amid a wider wave of lawsuits questioning whether businesses are using shared software and pricing algorithms to coordinate decisions that would otherwise be made independently.
AI pricing under growing legal scrutiny
The controversy extends well beyond the fast-food industry. Similar lawsuits have targeted hotels, casinos, property owners and other businesses accused of using pricing software to push costs higher for consumers.
At the heart of these disputes is a difficult question: when does using an algorithm to make commercial decisions cross the line into unlawful coordination between competitors?
Courts have generally recognised that businesses can use computer programs to help determine prices. However, competition law may come into play when competing businesses use shared technology or exchange sensitive pricing information in ways that restrict competition and inflate costs.
Antitrust expert Maurice Stucke, a professor at the University of Tennessee College of Law, has warned that greater reliance on automated pricing systems could create more opportunities for companies to coordinate their decisions.
The concern is that algorithms can analyse and respond to market information far more quickly than traditional pricing methods, potentially making it easier for businesses to align their behaviour without direct discussions.
Courts remain divided over algorithmic price-fixing claims
Recent rulings show that allegations involving AI and pricing software are far from settled.
In July, a federal appeals court revived a lawsuit accusing casino-hotels in Atlantic City of using shared pricing software to increase room rates. The 3rd US Circuit Court of Appeals highlighted how modern algorithms could overcome practical barriers that once made coordination between businesses more difficult.
The decision offered fresh momentum to plaintiffs arguing that technology can facilitate conduct prohibited under antitrust law.
But another appeals court reached a different conclusion in litigation involving major Las Vegas hotels. The 9th US Circuit Court of Appeals rejected a similar claim last year, finding that the use of shared price-recommendation software, alongside rising hotel rates, was insufficient to sustain the case.
A separate, long-running legal fight involving real estate software company RealPage has also become a major test of algorithmic pricing. The company has reached partial settlements in disputes alleging that landlords used its software to raise rents artificially, while continuing to contest allegations of unlawful conduct.
RealPage also secured a court ruling in New York in September blocking a new state law that sought to prohibit landlords from using algorithmic rent-setting tools. The decision underscored the difficulty of drawing a clear legal boundary between ordinary commercial software and technology allegedly used to undermine competition.
Why the McDonald’s case is different
The lawsuit against McDonald’s presents a question that distinguishes it from many earlier algorithmic pricing disputes: can franchise restaurants operating under the same brand be accused of engaging in unlawful price coordination through a common technology platform?
According to the complaint, around 95% of McDonald’s US restaurants are independently owned. The plaintiffs allege that the company monitors franchisees’ use of its pricing system and pressures them to follow its recommendations, potentially pushing up the cost of meals for customers.
The lawsuit seeks monetary damages on behalf of a proposed class comprising millions of consumers.
However, the franchise structure could complicate the claims. Although individual restaurants have separate owners, they operate under a common brand and follow a shared business model. Their relationship with the parent company may therefore distinguish them from independent hotel chains or competing landlords accused of coordinating prices.
Daniel Francis, an antitrust law professor at New York University, has argued that franchisees primarily compete with rival restaurant chains rather than with other outlets carrying the same brand. That distinction could become important in determining whether the alleged conduct amounts to unlawful coordination.
McDonald’s maintains that its pricing technology neither automates nor coordinates prices. Instead, the company says, it helps franchisees make decisions suited to their individual businesses and customers.
More lawsuits could follow
The case arrives as businesses increasingly incorporate AI and data-driven software into pricing decisions, while regulators and courts continue to determine how existing competition laws apply to these tools.
For consumers, the stakes are straightforward: whether technology intended to improve business decisions is instead contributing to higher prices.
For the courts, the challenge is more complicated. They must distinguish between legitimate software-assisted pricing and arrangements that allegedly allow businesses to sidestep competition.
Antitrust attorney Jeffrey Shinder, who is not involved in the McDonald’s litigation, expects more cases of this kind as public concerns about AI grow.
The outcome of the McDonald’s lawsuit could help shape how courts assess pricing systems within franchise networks, adding another significant chapter to the broader legal debate over algorithms, competition and consumer costs.
