McDonald's is facing a federal antitrust lawsuit alleging that its artificial intelligence-powered pricing technology allows thousands of independently owned franchise restaurants to coordinate menu prices, potentially forcing consumers to pay more for everyday items. The proposed nationwide class action was filed on October 2, 2026, in the U.S. District Court for the Northern District of Illinois.
The lawsuit, brought by Illinois consumer Michael Thomas, claims the fast-food giant uses a centralized pricing system to analyze confidential sales information and generate pricing recommendations across its restaurant network. According to the complaint, McDonald's tracks franchisee deviations from the system's recommendations in detail, follows up with franchisees who do not use it, and tells investors that "pricing non-compliance" factors into decisions about whether franchisees may be considered for renewal or expansion of their franchises.
The complaint argues the arrangement works in McDonald's favor because the company "earns money in its own corporate-operated stores and also earns royalty income based on revenues generated by the independent franchisees nationwide." It cites a McDonald's fact sheet from May 2024 stating that average menu prices rose about 40 percent between 2019 and 2024, arguing that customers "paid more for McDonald's food than they would have paid in a market in which true competition prevailed and franchisees set their prices independently." The case, Thomas v. McDonald's USA, LLC et al., seeks treble damages, injunctive relief, and attorneys' fees.
McDonald's strongly denies the allegations, maintaining that its franchise operators retain control over menu prices and that its technology does not automate or coordinate pricing. "AI does not set the price of a Big Mac or any other menu item," the company said, according to Reuters' October 8 reporting.
The dispute is the latest legal challenge involving algorithmic pricing, an increasingly controversial practice forcing U.S. courts to consider how decades-old antitrust laws apply when businesses use AI to influence commercial decisions. Companies in hotels, real estate, and health insurance are facing similar class actions. Courts have said there is nothing inherently illegal about using algorithms to set prices, but businesses may violate antitrust law if they use the technology to coordinate decisions with competitors and raise consumer costs - a line the McDonald's complaint argues has been crossed.
The case arrives as algorithmic pricing faces scrutiny across the economy, from dynamic airline fares to rental-housing software. How the Northern District of Illinois handles the franchise-network structure - where the restaurants are technically independent businesses that should compete - could shape the next wave of AI antitrust litigation.