McDonald's, and fast food in general, was once known for two things: dirt cheap pricing, and fast customer service. But, as with all things, the public perception has changed quite a lot. Whether it's increasing prices, worsening quality, or even AI price-fixing, as this lawsuit has alleged is happening, people aren't the most happy about things.
And that's why this lawsuit is a class-action one. As reported by the New York Post, plaintiffs are going to war against McDonald's. The lawsuit, which was filed on Friday, October 2, alleges that the giant violated antitrust law by fixing prices using "nonpublic data".
How, you ask? Well, the lawsuit itself explains, "The algorithm is programmed with rules tying one restaurant's price increases to whether other McDonald's restaurants have already raised prices." So, essentially, the lawsuit claims that separate McDonald's franchises appear to raise their prices across the country.
And, the part that has got the lawyers smelling the blood in the water: "McDonald's has independent access to [franchisee POS data] and there are no contractual limits on its right to access such information". This is illegal under US law, as the information is "competitively sensitive".
Lark Turner, a lawyer for the plaintiff, said in a statement that McDonald's "is leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry."
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McDonald's Fired Back in a Statement
For their part, McDonald's vehemently denies these allegations. In a statement released on Monday, they explained their side of things - they say they have never used AI for pricing.
Entitled "Separating Fact from Fiction", their press release sets out some "Facts". "There's been inaccurate reporting about hwo menu prices are set at McDonald's," it reads.
"FICTION: AI sets menu prices at McDonald's. FACT: It does not. McDonald's pricing recommendation tool provides restaurant-specific recommendations. It does not set or change prices. Franchisees decide what prices to charge and whether to use the recommendations available to them."
Their press release also went into detail about some other allegations that have been floating around recently, including dynamic pricing.
Whether this is true or not, one thing remains true - I just want the Dollar Menu back!
