McDonald's sued over AI pricing tool

McDonald's has argued for years that its franchisees set their own prices, and it acquired the AI company Dynamic Yield back in 2019. In 2023 the chain went viral over an $18 Big Mac meal at a Connecticut McDonald's, and that franchise's owner filed a lawsuit alleging it was the AI pricing tool that suggested the $18 price. A recent Reuters investigation reported that some franchise owners were pressured to use the AI pricing tools and record their deviations from the tool's recommendations; McDonald's called that reporting speculative and uninformed.

The case sits inside a broader wave of pushback against algorithmic pricing. At least 90 pieces of legislation have been filed across the country this year to push back against algorithmic price-fixing, according to Lindsay Owens of the thinktank Groundwork Collaborative, who recently authored a book on the topic. Experts quoted in the article say companies using AI to set or alter pricing could exacerbate the country's affordability crisis.

The stakes appear to hinge on how the court reads the tool itself: McDonald's describes it as optional information that franchisees are free to ignore, while the plaintiffs say drawing on millions of daily transactions to shape thousands of restaurants' prices crosses the line into coordination. For franchise owners and other chains offering similar pricing software, that distinction may set the terms for how such tools can be used going forward.