McDonald's was sued in a federal court in Illinois by a consumer who claims that the chain uses an artificial intelligence platform to coordinate prices among its franchisees, in what the lawsuit describes as an anti-competitive practice that has raised menu prices for millions of Americans.
According to the report by Associated Press (AP), the lawsuit was filed on Friday in the U.S. District Court for the Northern District of Illinois. The plaintiff, Michael Thomas, a resident of DeKalb, Illinois, claims to frequently visit the chain's restaurants and has noticed price differences between locations near his home.
The complaint accuses McDonald's of violating Section 1 of the Sherman Antitrust Act, as well as Illinois state laws regarding competition and deceptive business practices.
The core of the accusation is a machine learning platform —developed with technology from Tiger Analytics— that the company has been using since at least 2019 to process data from millions of daily transactions across nearly 14,000 American restaurants and generate recommended prices by product and location.
The lawsuit claims that the system shares confidential sales data at the store level among franchisees competing in the same markets, which would equate to illegal price coordination. The text of the complaint describes it as "an information exchange platform that extracts data from millions of daily transactions" and concludes that "the result is an algorithmic price fixing targeting customers who are already tightly budgeted."
Among the technical details is a so-called "30% rule": the algorithm recommended raising the price of an item when at least that percentage of restaurants had recently registered increases for that product. The demand also claims that average menu prices rose by approximately 40% between 2019 and 2024, a period during which food inflation hit consumers hard in the U.S.
The pressure on franchisees is another central aspect of the case. Five franchise owners told Reuters that they felt compelled to follow the recommendations, and corporate documents recorded the deviations from the suggested prices. Since January of this year, McDonald's business standards have required franchisees to engage "constructively" with price consultants and tools approved by the company.
This Tuesday, McDonald's firmly rejected the accusations. "AI does not set menu prices at McDonald's restaurants; franchisees do," the company stated in a press release, adding that the tools are optional and "do not automate, coordinate, or set prices in any way." A spokesperson was more direct: "All we do is provide the context of what is happening. We have no way of affecting menu prices at a restaurant."
The chain acknowledged that it has been using the tool for more than a decade, and that long before adopting it, it was already gathering data and recommending prices to its franchisees, who own and operate 95% of the U.S. locations.
The case falls within a growing antimonopoly scrutiny regarding the use of pricing algorithms across various industries. The closest precedent is that of RealPage: in May 2026, a federal court prohibited the operational use of non-public competitor data in that rental management software, applying the same legal theory that underlies the complaint against McDonald's.
The lawsuit requests that the case be certified as a class action, that damages be awarded to the class, and that agreements restricting competition be prohibited. The National Owners Association, which represents the franchisees of the chain, had not issued a public statement by the time of this article's publication.
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