A Fresno Big Mac Costs 21 Percent More Two Miles Away. A New Lawsuit Says the Algorithm Is Why.
A proposed class action filed October 2 in federal court in Chicago accuses McDonald's of using one AI pricing system across nearly 14,000 U.S. restaurants to coordinate prices rather than compete on them.
By Priya Kanth, Business & Economy
· 3 min read · Updated
Key Takeaways
- •A proposed class action filed October 2, 2026 in the Northern District of Illinois accuses McDonald's of using an AI pricing system to coordinate menu prices across nearly 14,000 U.S. restaurants since at least 2019.
- •Two McDonald's locations two miles apart in Fresno, California charge $5.69 and $6.89 for a Big Mac, a 21 percent difference, both prices generated by the same pricing engine.
- •William Kovacic, a former FTC commissioner now at George Washington University, says the antitrust warning McDonald's includes in its own pricing portal terms amounts to an acknowledgment of legal risk.
- •A separate, earlier dispute with Connecticut franchisee George Michell showed the same AI tool once recommended roughly $18 for a Big Mac meal, more than $7 above the chain's reference price at the time.
- •McDonald's says the tool only makes price recommendations and that franchisees retain final pricing authority; no court has ruled on the new lawsuit's merits.
A Big Mac costs $5.69 at one McDonald's in Fresno, California. Two miles away, another McDonald's charges $6.89 for the same sandwich, a 21 percent gap. Both restaurants pull their price recommendations from the same machine learning system, and a proposed class action filed October 2 in federal court in Chicago argues that system is doing something it should not: coordinating prices instead of letting restaurants compete on them.
The short answer
An Illinois McDonald's customer, Michael Thomas, is suing the company in the Northern District of Illinois, alleging its AI pricing engine violates Section 1 of the Sherman Antitrust Act by pooling nonpublic sales data from nearly 14,000 U.S. restaurants into one system that generates recommended prices. McDonald's says the tool only suggests prices and franchisees decide. This is a proposed class action, not a ruling, and could reach millions of customers if a judge certifies it.
21%
Big Mac price gap between two Fresno, California McDonald's two miles apart
$5.69 versus $6.89, both generated by the same AI pricing recommendation system.
The legal theory behind the lawsuit
The complaint, filed in the U.S. District Court for the Northern District of Illinois, names Thomas as lead plaintiff and is brought by attorney Lark Turner. It alleges McDonald's has run the pricing system since at least 2019, drawing transaction data from nearly 14,000 U.S. locations, company owned and franchised alike, to generate store level price recommendations based on local demand and what the system projects a given customer will pay. The suit argues that pooling competitors' sales data into one engine amounts to price coordination under Section 1 of the Sherman Act, and it seeks class status on behalf of potentially millions of McDonald's customers.
“AI does not set the price of a Big Mac or any other menu item.”
The pricing tool's first legal test was not this one
A separate, earlier dispute already put the same pricing tool in front of a judge. Connecticut franchisee George Michell, who operates dozens of McDonald's restaurants, sued the company in a fight over whether it could force him out of the system. That case turns on a franchise agreement dispute, not antitrust law, but Michell's filings cited the AI tool's 2023 recommendation of roughly $18 for a Big Mac meal at his highway adjacent location, well above the chain's roughly $10.19 reference price at the time. McDonald's disputed Michell's claims and said he had repeatedly breached his franchise agreements. That case is still in the courts.
What McDonald's own fine print already conceded
McDonald's pricing portal warns franchisees that they may be competitors of one another and must comply with antitrust law. William Kovacic, director of the competition law center at George Washington University and a former Federal Trade Commission commissioner, says that language cuts against the company's current defense.
“an acknowledgment there's a potential problem”
Other legal analysts covering the case take the opposite view. They argue McDonald's exposure is limited because the parties the system allegedly coordinates are franchisees, not independent competitors, and courts have historically given parent brands wide latitude to set pricing rules inside their own franchise networks. Which reading wins depends on how a judge treats a franchise system: one company setting internal policy, or a group of separately owned businesses whose prices are not supposed to move together.
Why this reaches beyond one burger chain
The Federal Trade Commission has been scrutinizing algorithmic pricing tools across industries for signs they let competitors coordinate without ever speaking to each other directly. McDonald's says its tool belongs to a category now common in retail and hospitality, and that framing holds up. Algorithmic price recommendations are standard practice well beyond fast food. What is untested is applying an antitrust theory built for human price fixing to a franchise network that shares one algorithm. No court has ruled on the merits, and McDonald's has not yet filed a formal response to the complaint.
- McDonald's
- antitrust
- algorithmic pricing
- Sherman Antitrust Act
- class action lawsuit
Sources
- 01McDonald's Hit With Antitrust Suit Over AI-Assisted Menu Pricing, PYMNTS / CPIpymnts.com
- 02McDonald's hit with class action alleging AI-powered menu price-fixing, Claims Journalclaimsjournal.com
- 03McDonald's AI Pricing Tool Has Been Shaping Big Mac Costs Since 2019, Yahoo Financefinance.yahoo.com
- 04A prominent McDonald's franchisee sues the brand, claiming it wants him out of the system, Restaurant Businessrestaurantbusinessonline.com
Corrections
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About the reporter
Business & Economy Reporter, Trestlewire
Before I was a journalist, I spent five years as an equity research analyst, building spreadsheet models that nobody outside a trading floor would ever see. I learned two things in those years: that a compelling story and an accurate one are not always the same thing, and that almost every business narrative worth writing about is sitting inside a spreadsheet somewhere, waiting for someone to open the file.
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