A customer has sued McDonald’s in federal court in Chicago, alleging the company’s AI pricing tool lets it coordinate menu prices across independent franchisees in violation of antitrust law. McDonald’s denies it. The company says its franchisees, not software, set what a Big Mac costs.
What the McDonald’s AI Pricing Lawsuit Says
The proposed nationwide class action seeks to represent millions of McDonald’s customers. Newsweek reported that the plaintiff is Michael Thomas and that the complaint was filed Oct. 2.
Law Commentary also gave Oct. 2 and put the case in the U.S. District Court for the Northern District of Illinois. Other outlets, including AP via KSAT, published the story Oct. 6 and identified Thomas as a resident of DeKalb, Illinois. A CP24 report did not name the plaintiff.
The complaint says McDonald’s conspires with its independent franchisees by feeding algorithms nonpublic transaction data, then sending out recommended prices, according to Claims Journal. It says the system covers nearly 14,000 franchised and company-owned restaurants. The complaint argues that “independent businesses must set their prices independently.”
Lark Turner, a lawyer for the plaintiff, said McDonald’s is “leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry”, per the CP24 report. The suit seeks class certification, damages for customers and a court order against agreements that restrict competition, AP reported.
Law Commentary’s summary says the claim rests on Section 1 of the Sherman Antitrust Act and alleges the machine-learning system has operated since at least 2019. The same summary says the complaint accuses McDonald’s of monitoring franchisees that departed from the recommended prices and of making participation mandatory in January 2026. PYMNTS described the 2019 start date the same way. Those are the plaintiff’s allegations. McDonald’s disputes them.
McDonald’s Response: Franchisees Set the Prices
McDonald’s said in a statement carried by AP, “AI does not set menu prices at McDonald’s restaurants – McDonald’s franchisees do.” A company spokesman also said McDonald’s has no way to affect menu pricing in a restaurant. AP reported that the company has used a pricing suggestion tool for more than a decade and that franchisees own 95% of its roughly 14,000 U.S. locations.
Law Commentary reported that the company attributes price differences between restaurants to operating costs and local competition. Claims Journal reported that McDonald’s calls pricing recommendation tools standard industry practice. The company’s position is that a recommendation does not bind anyone.
The ownership split matters to the argument. If franchisees own 95% of about 14,000 U.S. restaurants, as AP reported, roughly 700 restaurants are company-run and McDonald’s sets their prices directly. The other 13,300 or so belong to owners who answer to the company through franchise agreements. The Fresno restaurant in the Reuters report is one of the 700, which means the $5.69 price there came from McDonald’s itself. The complaint, as Claims Journal described it, covers both groups.
The Reuters Report That Came First
The lawsuit followed a Sept. 29 Reuters investigation by Waylon Cunningham, republished by The Star in Malaysia. Reuters described a pricing engine that uses machine learning on millions of daily transactions to produce “optimal prices” for each location, with estimates of what customers will pay built in.
Reuters reported a Big Mac at $5.69 in one company-run Fresno, California, restaurant and $6.89 at another store two miles away. The gap is $1.20, or 21%. McDonald’s told Reuters the portal is “a tool, not a mandate” and called the reporting “speculative and uninformed.” Karen King, a retired franchisee, told Reuters about pricing: “You don’t really have much of a choice anymore.”
Why Algorithmic Price-fixing Is An Antitrust Question
Antitrust law treats an agreement among competitors to set prices as illegal. Independent franchisees compete with one another for nearby customers. The plaintiff’s theory is that a shared tool, fed each owner’s sales data, can substitute for a phone call among them.
William Kovacic of George Washington University told Reuters the legal disclaimers around the tool were “an acknowledgment there’s a potential problem”. The disclaimers are the statements telling franchisees that using the recommendations is optional.
That is also the center of McDonald’s defense. If each franchisee chooses a price on their own, no agreement exists. If most franchisees accept the suggestions nearly every time, a court will have to decide whether the suggestions work as an agreement. The complaint’s allegation that the tool draws on nonpublic data from competing owners is what it relies on to describe the system as more than a corporate price list.
Newsweek reported that the suit arrives as states restrict algorithmic pricing, including a California law on common pricing algorithms and prohibitions on pricing that uses personal data to set individual customer prices. Claims Journal described the McDonald’s case as part of a wave of recent class actions over algorithmic pricing in several industries.
What Happens Next
The case is at its earliest stage. The reports on the suit describe the complaint and McDonald’s statements to reporters. They do not describe any ruling on class certification. For customers, the practical question is the price gap itself. A 21% spread inside one California city is the figure Reuters documented.
The lawsuit asks a court to decide whether that spread comes from independent decisions or from a shared formula. Image: Original photograph of a McDonald’s menu board shot by Onsite! staff or a licensed wire-agency photo; McDonald’s logos and trade dress need the company’s permission for anything beyond editorial use.
