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Lawsuit Says McDonald’s AI Raised Menu Prices

October 8, 2026
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October 8, 2026 09:00 AM PST

(PenniesToSave.com) – Michael Thomas eats at McDonald’s often. The DeKalb, Illinois, resident says his regular order is a Quarter Pounder with cheese, french fries, and a Coke, and that he noticed the same items carrying different prices at restaurants near his home [4]. On Oct. 2, he filed a proposed class-action lawsuit in federal court in Chicago alleging that McDonald’s uses an AI-powered pricing system to coordinate menu prices among restaurants that are supposed to compete with one another [1].

McDonald’s denies the allegations. The company says artificial intelligence does not set its menu prices and that the independent owners who run most of its restaurants decide what customers pay [2].

The case arrives as fast food takes a bigger bite out of household spending. According to USA Today, the complaint cites a 2024 McDonald’s fact sheet stating that the average price of a menu item rose about 40% between 2019 and 2024 [1]. For anyone trying to build a household budget that keeps pace with rising prices, a drive-thru meal that once felt like an inexpensive fallback now deserves a line of its own. The lawsuit also raises a question that reaches well past burgers: when one company’s software recommends prices to thousands of separately owned businesses, is that smart local pricing or coordination among competitors?

What Does the Lawsuit Claim McDonald’s Did?

The case is Thomas v. McDonald’s USA, LLC, No. 1:26-cv-12149, filed in the U.S. District Court for the Northern District of Illinois and assigned to Judge Durkin [3]. Derek Yeats Brandt of Clarkson Law Firm represents Thomas, and the suit names the McDonald’s parent companies as defendants while alleging that unnamed co-conspirators, including franchisees and company-operated restaurants, knowingly participated [3].

According to Antitrust Law Daily, the complaint brings two counts under Section 1 of the Sherman Act, one alleging a price-fixing conspiracy and one alleging an unlawful exchange of data, plus claims under the Illinois Antitrust Act and the Illinois Consumer Fraud and Deceptive Business Practices Act [3]. The complaint alleges that participating restaurants fed current, nonpublic, store-level sales and pricing data into a common engine, knew their competitors were doing the same, and agreed to use the engine’s outputs instead of pricing on their own [3]. It also alleges the system applied a 30% rule that conditioned one restaurant’s price increases on increases at competing restaurants [3].

Reports differ on how the complaint describes the tool’s role. USA Today characterizes the complaint as alleging that the system recommends prices [1], while the complaint, as quoted by the Associated Press, says the platform draws on millions of daily transactions to set menu prices across thousands of U.S. restaurants [4]. The complaint describes the consequence for customers in pointed terms [4].

[A]lgorithmic price-fixing aimed at customers who are already stretched thin.

Thomas v. McDonald’s USA complaint, as quoted by the Associated Press [4]

Thomas is asking a federal judge to certify a nationwide class of McDonald’s customers and is seeking damages [1]. Until the court rules, the claims remain allegations.

How Does McDonald’s Pricing Tool Work?

Even the tool’s history is disputed. The complaint alleges that McDonald’s built its pricing platform after acquiring the AI company Dynamic Yield in 2019, a business it later sold to Mastercard [3]. McDonald’s says the tool has been in use for more than a decade and that the company collected data and recommended prices to franchisees even before it existed [4].

Much of the public detail comes from a Reuters investigation the lawsuit cites. According to Newsweek’s account of that report, the engine uses machine-learning algorithms to analyze millions of daily transactions across almost 14,000 U.S. restaurants and generate what McDonald’s calls an optimal price for menu items at individual locations [6]. Reuters reported that the system weighs local demand, competitor pricing, and estimates of customer willingness to pay in local markets [6]. The New York Post, citing the same reporting, said the platform also pulls public prices from nearby rivals such as Wendy’s and Burger King, both of which say they do not use AI in pricing decisions [7].

The tool goes by several names. The McDonald’s franchise disclosure document lists an annual fee for a Pricing Engine and describes that fee as optional, which the complaint disputes [3]. McDonald’s calls it a pricing recommendation tool and a pricing portal [2][6]. According to Reuters, as relayed by the Post, the portal’s own legal terms warn franchisees that other owners using the same tool may be considered competitors for antitrust purposes [7]. McDonald’s has also told investors its pricing algorithm leads the industry and is central to its affordability strategy [7].

What Is McDonald’s Saying in Its Defense?

McDonald’s was defending its pricing practices before the lawsuit was filed. On Sept. 29, a company spokesperson told the New York Post that the Reuters report was misleading, dismissing its claims as speculative and poorly informed and saying the tool only suggests prices rather than setting them in real time [7]. On Oct. 1, the day before Thomas filed suit, McDonald’s posted a fact-versus-fiction page on its corporate website laying out its position [2].

AI does not set the price of a Big Mac or any other menu item.

McDonald’s corporate statement, Oct. 1, 2026 [2]

On that page, McDonald’s says it does not use dynamic pricing, does not change prices in real time or by time of day, and does not price menu items based on an individual customer’s willingness to pay [2]. The company says its tool focuses on restaurant-level conditions across a network of more than 46,000 restaurants worldwide, noting that a location inside a busy transit hub faces different circumstances than one in a suburb or small town [2].

In a statement emailed to Newsweek on Oct. 6, McDonald’s USA repeated its rejection of the claims and described its pricing portal as a tool rather than a requirement [6]. The company told the Associated Press the complaint contains many inaccuracies and that its optional tools play no role in automating, coordinating, or fixing prices [4]. A spokesperson also told the Post that McDonald’s uses AI and other tools to give franchisees economic data about their neighborhoods, according to the Post’s account [5]. The company’s broader argument is one most businesses would recognize: pricing for local conditions with data is standard practice, and the people running each restaurant make the final call [2].

Who Really Sets the Price, the Franchise Owner or Corporate?

About 95% of McDonald’s restaurants are run by independent franchisees [3]. These are local business owners who carry their own costs and who, under McDonald’s franchise agreements and disclosure documents, set their own prices and compete with one another [3]. The lawsuit’s central question is whether that independence holds up in practice.

Five store owners told Reuters the company pressured them to use the pricing tools, and a franchisee document showed McDonald’s had begun tracking in detail how far restaurants strayed from suggested prices, according to the Post [7]. The complaint alleges McDonald’s tracked those deviations and tied franchise renewals to adopting the platform’s suggestions [3].

The sources offer three accounts of what changed in January. The complaint alleges that use of the pricing tools became mandatory [3]. A message to franchisees, as reported by the Post, updated business standards to require owners to engage constructively with McDonald’s approved pricing consultant and tools [7]. McDonald’s says the portal is a tool, not a requirement [6].

Chief Executive Chris Kempczinski addressed pricing during the company’s August earnings call. According to the Post, he noted that about a third of franchisees had not adopted the Under $3 Menu and said that failing to follow pricing guidance can, in certain cases, come up in conversations about renewing leases or opening new locations [7].

That detail complicates the lawsuit’s story. The Post reports that corporate has been pushing owners to lower prices and add value deals, while many franchisees have resisted because of rising costs [7]. The complaint, by contrast, alleges the tool pushed prices up [3]. Connecticut franchisee George Michell has sued McDonald’s separately, alleging the AI tools suggested the $18 Big Mac meal price that drew outrage at his restaurant in 2024; McDonald’s disputes his claims, and that case is ongoing [7].

Why Can the Same Burger Cost More a Few Miles Away?

Price gaps between nearby McDonald’s restaurants are easy to find. When the New York Post checked the McDonald’s mobile app for its Sept. 29 report, a Big Mac cost $5.69 at one store in Fresno, California, and $6.89 at a location about two miles away [7]. That is a $1.20 difference, roughly 21% more for the same sandwich. The Post noted that it is unclear how much of the gap comes from the algorithm and how much from each owner’s own judgment, since owners have the final say [7].

One Fresno store charged $5.69 for a Big Mac. Two miles away, the same burger cost $6.89.

New York Post check of the McDonald’s app [7]

Franchisees told Reuters that the algorithm has widened the gaps on identical items at restaurants in the same neighborhoods, according to the Post [7]. McDonald’s points to a different explanation, saying local costs, demand, competition, and economic conditions can differ even between restaurants only a few miles apart [2].

Whatever the cause, the practical lesson rewards the customer who pays attention. Because each restaurant can price on its own, checking the menu in the app at two or three nearby locations before ordering can turn up a real difference on a regular order. Value pricing varies too: with about a third of franchisees passing on the Under $3 Menu, according to the Post, a deal at one location may not exist at another [7]. Small differences add up for anyone who buys fast food weekly, and practical ways to cut back on everyday expenses often start with exactly this kind of comparison. A customer’s willingness to drive past the pricier store remains one of the most direct checks on what any restaurant can charge.

Could AI Pricing Change What Everyday Purchases Cost?

McDonald’s is not the first company to face this kind of claim. Similar lawsuits have accused companies in the hotel and apartment rental industries of using pricing algorithms to coordinate prices, and Reuters has reported that other fast-food companies are exploring AI for pricing and other operations, according to USA Today [1].

State lawmakers are moving as well. According to Newsweek, a California law that took effect in January amended the state’s antitrust rules to prohibit using a common pricing algorithm that relies on competitors’ data as part of an anticompetitive agreement [6]. Maryland, Connecticut, and New Jersey have enacted restrictions on so-called surveillance pricing, in which companies use personal information such as browsing habits or location to estimate what an individual customer will pay, and lawmakers in other states have proposed similar measures [6].

Customers have shown they can move faster than legislatures. Wendy’s quickly backed away from a 2024 plan to test dynamic pricing on digital menu boards after an online outcry, and Instacart in December ended a program that charged different prices for the same product ordered at the same time from the same store [7]. In the Wendy’s case, customer backlash alone was enough to change course.

Newsweek describes the McDonald’s case as an early test of how courts apply long-standing antitrust rules to AI-powered pricing [6]. That framing matters. Federal antitrust law already prohibits competitors from agreeing to fix prices, and the court can decide whether shared data and a common algorithm cross that line without waiting on a growing patchwork of state rules [3][6].

Final Thoughts

Nothing in this case has been decided. Thomas is still asking the court to certify a class, the allegations have not been proven, and McDonald’s denies them [1][2]. There is no refund or claims process for customers at this stage.

At its core, the dispute turns on one question. When independent restaurants feed private sales data into the same corporate software and receive price recommendations built from that pooled data, are they still competing, or are they coordinating [3]? McDonald’s says owners decide and the tool simply informs them [2]. The complaint says the system, and the pressure behind it, amounts to price-fixing [3]. Reporting on owner pressure, alongside corporate’s push for lower prices, gives both sides material to work with [7].

For the average American, the takeaways are practical. Prices at the McDonald’s down the street are not set by a national menu, and the gap between two nearby stores can top a dollar on a single sandwich [7]. Comparing locations in the app, using available deals, and following a few simple money-saving steps protects a budget no matter how the case ends. Whether the court certifies a class is the next development worth watching, since that decision will shape who could share in any recovery [1].

Fair competition matters on both sides of the counter. It protects the independent owners who invest their own money in these restaurants, and it protects the customers who watched average menu prices climb about 40% from 2019 to 2024 [1].

Works Cited

[1] Thompson, Anthony. “McDonald’s Sued over Alleged AI-Powered Menu Price-Fixing.” USA Today, 7 Oct. 2026, www.usatoday.com/story/money/2026/10/07/mcdonalds-ai-menu-pricing-tool-sparks-class-action-lawsuit/92138910007/.

[2] “Separating Fact from Fiction: AI Does Not Set Prices at McDonald’s.” McDonald’s, 1 Oct. 2026, corporate.mcdonalds.com/corpmcd/our-stories/article/how-mcdonalds-sets-prices.html.

[3] Ryesky, Kenneth H. “McDonald’s Sued for Anticompetive [sic] Use of Artificial Intelligence-Driven Algorithmic Pricing Tools.” Antitrust Law Daily, Wolters Kluwer, 7 Oct. 2026, www.vitallaw.com/news/antitrust-news-mcdonald-s-sued-for-anticompetive-use-of-artificial-intelligence-driven-algorithmic-pricing-tools/ald012adcc6c5554f46c5965910cba3e8a662.

[4] Viviani, Nick. “McDonald’s AI-Enhanced Pricing Tool Is Pushing Prices Higher, Lawsuit Claims.” FOX 13 Tampa Bay, FOX Television Stations, 6 Oct. 2026, www.fox13news.com/news/mcdonalds-ai-enhanced-pricing-tool-is-pushing-prices-higher-lawsuit-claims.

[5] Campanile, Carl. “McDonald’s Brushes Off Claims It’s Using AI to Set Prices as Big Nothingburger.” New York Post, 1 Oct. 2026, nypost.com/2026/10/01/business/mcdonalds-brushes-off-claims-its-using-ai-to-set-prices-as-big-nothingburger/.

[6] Greenwood, Amanda. “McDonald’s Faces Lawsuit After Denying AI Price Strategy.” Newsweek, 6 Oct. 2026, www.newsweek.com/mcdonalds-faces-lawsuit-after-denying-ai-price-strategy-12529965.

[7] Herzlich, Taylor. “McDonald’s Pushes AI Tools That Suggest Big Mac Prices Based on ‘Customer Willingness to Pay.'” New York Post, 29 Sept. 2026, nypost.com/2026/09/29/business/mcdonalds-pushes-ai-tools-that-suggest-big-mac-prices-based-on-customer-willingness-to-pay/.