McDonald's accused of AI-fueled price fixing in federal court — says lawsuit is 'filled with inaccuracies'

Fast food giant McDonald's [NYSE: MCD], which has struggled with its integration of artificial intelligence in the past, is now facing a federal lawsuit that alleges the company has violated U.S. antitrust laws with its AI tool, which recommends prices to franchisees across the country.

The tool, the lawsuit alleges, shares nonpublic data that typically wouldn't be shared with franchisees in the same market, including store-level sales. According to Reuters, the lawsuit accuses McDonald's of using the nonpublic data to conspire with independent franchises and fix prices . It also says the tool is responsible for higher prices at McDonald's locations throughout the country.

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McDonald's said the lawsuit is "filled with inaccuracies" and it would defend itself.

McDonald's has been fighting allegations that it's using AI to set prices for a while now. The talk has grown so loud online that the company posted a page on its website — titled "Separating Fact from Fiction: AI Does Not Set Prices at McDonald's" — to dispute the claims.

"AI does not set the price of a Big Mac or any other menu item," the company wrote. "It does not change prices. And it does not determine what an individual customer pays. McDonald's does not use dynamic pricing. McDonald's provides franchisees with tools, resources, research and recommendations to help them make informed decisions. Franchisees independently set menu prices at their restaurants."

The tool, the company continued, focuses on restaurant level market dynamics that change by geographic location and follows standard business practices, such as considering local costs, competition, customer demand and economic conditions.

While the tool does offer pricing recommendations, franchisees ultimately decide what's the best value for their customers.

"A recommendation is exactly that: a recommendation, not a mandate," the company wrote. "Franchisees are not required to accept a pricing recommendation."