In a development that will shock precisely no one who has ever stared at a menu board while calculating whether fries still count as a food group, McDonald’s now finds itself on the receiving end of a proposed class-action lawsuit. An Illinois customer named Michael Thomas has filed suit in federal court in Chicago, alleging that the company used a centralized machine-learning pricing engine to coordinate menu prices across thousands of locations in a way that produced higher prices for customers.
According to the complaint in Thomas v. McDonald’s USA LLC, the system collects nonpublic sales, transaction, and product-mix data from restaurants through a required point-of-sale system and generates recommended prices for individual locations. The plaintiff claims this arrangement allows price increases at one restaurant to influence recommendations at others, and that franchisees face practical pressure to follow the recommendations because compliance is tracked and factored into evaluations such as franchise renewals and expansion approvals. The alleged scheme is said to date to at least 2019, the same year McDonald’s acquired the AI company Dynamic Yield. Average menu prices, the suit notes, rose roughly 40 percent between 2019 and 2024.
Roughly 95 percent of McDonald’s U.S. restaurants are franchises that are supposed to set their own prices. The complaint asserts that the pricing engine effectively undercut that independence by pooling confidential data that competing locations would not ordinarily share and then pushing a common set of “optimized” recommendations. One detail that has drawn attention is the complaint’s description of a so-called 30 percent rule, under which the system reportedly recommends raising an item’s price once a threshold share of stores have already done so. The plaintiff, who says he typically orders a Quarter Pounder and noticed varying prices near his home in DeKalb, Illinois, seeks to represent a nationwide class of customers who bought menu items at either company-owned or franchised restaurants. The claims invoke the Sherman Act, the Illinois Antitrust Act, and Illinois consumer-protection statutes, and the suit seeks damages, including treble damages, plus injunctive relief.
McDonald’s response has been consistent and emphatic. The company has stated that “AI does not set the price of a Big Mac or any other menu item,” that franchisees make their own pricing decisions, and that the use of pricing-recommendation tools and analytics is widespread across industries. In statements to multiple outlets, McDonald’s has called the complaint filled with inaccuracies and said it will vigorously defend itself. It has also disputed characterizations of the underlying Reuters reporting that first detailed the system, labeling that coverage speculative and uninformed. The company maintains that the tool simply provides information franchisees are free to accept or ignore.
It is, of course, entirely possible that every franchisee independently arrived at nearly identical conclusions about what customers would tolerate, and that the software merely reflected those independent judgments back in a helpful, non-binding way. It is equally possible that the roughly 40 percent average menu-price increase over five years had nothing whatsoever to do with a centralized engine that estimates “willingness to pay” and “price sensitivity” using data from millions of daily transactions across nearly 14,000 restaurants. After all, costs for beef, labor, packaging, and rent have risen, and many restaurant chains have raised prices. The coincidence of the pricing system’s reported rollout with the steepest stretch of increases is simply one of those things that happens when large organizations adopt modern analytics. Nothing to see here, except the part where a federal complaint alleges that the practical effect was coordinated, supra-competitive pricing that customers paid.
Similar algorithmic-pricing lawsuits have been filed in recent years against companies in hotels, apartment rentals, and other sectors. Courts have reached mixed results so far, and the McDonald’s case is still in its early stages. No class has been certified, no findings of fact have been made, and the allegations remain unproven. The complaint’s lawyers have described the arrangement as leveraging data and the franchised system “to nickel-and-dime consumers down to the last French fry.” McDonald’s, for its part, continues to insist that the AI does not set prices and that the lawsuit mischaracterizes ordinary business tools.
In the meantime, customers who have watched the cost of a basic meal climb can take comfort in the official position that any such climb was the product of independent, local decisions by franchisees who just happened to have access to the same sophisticated recommendations derived from the same pooled data. Whether a court ultimately agrees that this arrangement is lawful competition or something else remains to be seen. Until then, the pricing engine will continue to do whatever it does, and the menu boards will continue to reflect whatever the franchisees decide after consulting it. The fries, at least, are still optional. The sarcasm is not.