Michael Thomas, an Illinois resident, filed a proposed nationwide class-action lawsuit against McDonald's in federal court in Chicago on October 2, 2026. The complaint alleges that McDonald's uses an AI tool to set menu prices across its independently owned franchises, a practice Thomas claims constitutes algorithmic price-fixing and violates federal antitrust law. Thomas asserts that he has paid elevated prices for the same menu items at different McDonald's restaurants near his home.
Approximately 95% of McDonald's 14,000 U.S. restaurants are operated by franchisees, who are generally expected to set their own prices under company policy. Antitrust laws require businesses to determine prices independently to maintain market competition. The lawsuit contends that McDonald's AI tool, which has been in use since at least 2019, collects data from millions of daily transactions across its network. This data, including nonpublic sales information from competing franchises, is then used to generate price recommendations for menu items. The complaint suggests that this system allows for an illegal exchange of sensitive pricing information among what should be independent competitors.
McDonald's acquired the AI company Dynamic Yield in 2019, which it later sold to Mastercard. The lawsuit alleges that the company has since operated a centralized pricing tool that relies on a required point-of-sale system to send each restaurant's sales data to McDonald's. The tool then recommends item-level prices, partly based on local customer willingness to pay. The complaint further claims that the tool suggests price increases once a certain percentage of stores have already implemented them.
McDonald's has publicly denied the allegations, stating that the lawsuit is "filled with inaccuracies" and that the company will "vigorously defend against this lawsuit." A spokesperson for McDonald's stated that AI does not set menu prices, but rather franchisees make those decisions. The company maintains that optional tools are available to franchisees to assist their business decisions, but these tools do not automate, coordinate, or fix pricing. McDonald's also issued a statement on October 1, the day before the lawsuit was filed, denying the use of dynamic pricing and characterizing its tool as providing information that franchisees are free to adopt or reject.
However, the lawsuit alleges that McDonald's exerts "significant leverage" over its franchisees, potentially pressuring them to follow the pricing recommendations. The complaint claims that McDonald's has tracked franchisees' deviations from suggested prices and has conditioned franchise renewals on the implementation of the platform's pricing suggestions, making the use of the tools mandatory in January 2026. This litigation follows increased scrutiny of McDonald's pricing in recent years, with the average price of a menu item reportedly increasing by about 40% between 2019 and 2024.
The lawsuit seeks damages for affected customers and a court order to prevent McDonald's from enforcing agreements that allegedly restrict competition. The court must first certify the proposed class before the claims can proceed on behalf of McDonald's customers nationwide.