McDonald’s Sued Over AI-Powered Menu Price-Fixing
A federal class action lawsuit accuses McDonald's of using an AI-powered system to coordinate menu prices across thousands of locations, and the outcome could reshape how artificial intelligence is used in business far beyond fast food.
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McDonald’s (NYSE: MCD | MCD Price Prediction) has been hit by a class action suit over AI-powered menu price-fixing. According to Reuters, the class action suit says, “McDonald’s has been sued in federal court in Chicago in a proposed nationwide class action alleging the fast-food company illegally coordinates menu prices across its franchises and company-owned restaurants through an AI-powered pricing system.”
At the heart of the suit is the use of algorithms to help set prices without undercutting sales. Allegedly, the system applied to both franchises and company-owned restaurants. If allowed, it could change retail considerably.
The use of AI across many industries raises the question of whether it boosts productivity and profits or is used to violate current laws. If the McDonald’s case progresses, it will be an early answer to that question.
AI has already proven itself to be a massively useful tool for efficiency. And it may replace many humans. Ironically, that could include many workers at McDonald’s locations.
AI-based lawsuits are bound to move across a huge number of industries. Much of its capability is new, and companies may be unclear about how to regulate its use.
In the McDonald’s case, part of the argument will undoubtedly be that it used data not available to anyone other than it and its franchises. If the data were public and customers could see it, would customers’ views change?
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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
