McDonald's faces a federal antitrust lawsuit over its use of an AI tool that prosecutors say enables independently owned franchises to share nonpublic pricing and sales data, allegedly inflating menu prices for consumers.
The vast majority of McDonald's US stores operate as independently owned franchises required under company policy to set prices individually. US antitrust law prohibits businesses from coordinating prices with competitors, as such coordination can reduce market competition and raise costs for consumers.
The lawsuit asserts that the AI tool circumvents this requirement by allowing franchises to exchange confidential pricing and sales information. Prosecutors characterise this data-sharing mechanism as a violation of antitrust law.
McDonald's company policy states that franchise locations must independently determine their own pricing. The lawsuit directly challenges whether the AI tool's function aligns with that stated independence requirement.
The case hinges on whether the tool facilitates price coordination that would otherwise be illegal if done directly between franchise owners. Antitrust enforcers view price coordination among competitors, even when mediated through technology, as potentially anticompetitive. The plaintiffs claim the AI system effectively pools competitive information that individual franchise owners would not ordinarily access, enabling them to align pricing decisions.
The lawsuit names menu price inflation as a direct consumer harm resulting from the alleged scheme.