Lawmakers probe McDonald’s AI pricing practices

The senators expressed concerns that the AI tools could be used to inflate prices for consumers and potentially facilitate anti-competitive behavior among franchisees. The letter, signed by Warren and Representatives Greg Casar, Becca Balint, Jesus Garcia, and Mary Gay Scanlon, requests clarification on several points, including whether the tools incorporate data from the McDonald’s loyalty program, how franchisees are guided to use the system, and whether an antitrust review was conducted prior to implementation. A response is requested by November 16th.

McDonald’s has not yet responded to the letter. Previously, the company stated that its pricing tools do not rely on individual customer data and that franchisees retain the autonomy to set their own prices. They also characterized earlier reporting as “speculative and uninformed.”

According to a Reuters report, three franchisees reported that the pricing engine has led to increased price discrepancies between nearby locations. Two separate class action lawsuits have recently been filed in federal court, alleging illegal price coordination among franchisees and company-owned restaurants through a centralized algorithmic system. McDonald’s maintains that franchisees independently determine pricing and that pricing recommendation tools are a common business practice.