A McDonald’s regular from DeKalb, Illinois, named Michael Thomas filed a proposed nationwide class action in federal court in Chicago last Friday, accusing the company of running what the complaint calls “algorithmic price-fixing aimed at customers who are already stretched thin.” The suit says McDonald’s has “built and for years deployed its own information-sharing pricing platform, which draws on data from its millions of daily transactions to set menu prices across thousands of U.S. restaurants,” and that the platform runs on store-level sales data that competing franchisees would not normally share with each other. McDonald’s answer, given to the Associated Press, was flat: “AI does not set menu prices at McDonald’s restaurants,” franchisees do, and its optional tools “do not automate, coordinate or fix pricing in any way.”
Nearly every story since has stopped there, complaint against denial. What none of them has done is set this case beside the two algorithmic-pricing fights the courts and the Justice Department have dealt with in the past fourteen months, or beside the appeal McDonald’s lost in the same federal circuit three years ago. Do that and the denial starts to look like an answer to a question nobody asked.
The Denial Answers a Different Question
McDonald’s saw this coming. On October 1, the day before the suit was filed, it published a statement titled “Separating Fact from Fiction: AI Does Not Set Prices at McDonald’s,” after Reuters reported in late September that its pricing tool used AI to set prices. The company said AI does not set the price of a Big Mac, does not change prices, and does not decide what an individual customer pays, and it said McDonald’s does not use dynamic pricing, Newsweek reported.
The lawsuit does not need AI to set a single price. Its theory is about the data. According to Newsweek’s account of the complaint, the system analyzes millions of daily transactions across nearly 14,000 U.S. restaurants and produces what the company calls an “optimal price” using local demand, competitor pricing and estimates of what customers are willing to pay. The legal question is whether one operator’s nonpublic sales figures shape the price recommended to the operator down the road. McDonald’s statement does not address that, and it is the whole case.
Where the Courts Have Drawn the Line
In August 2025 the Ninth Circuit issued the first appellate ruling on algorithmic pricing, upholding the dismissal of a suit against Las Vegas hotels that used the same revenue software. The court stressed that the licenses were non-binding and held that competitors each deciding on their own to use the same software is not, without more, a Sherman Act violation. That is the ground McDonald’s is standing on when it calls its tools optional.
Three months later the Justice Department reached a settlement with RealPage, the rent-pricing company it had accused of helping landlords align prices. The deal bars RealPage from using competitors’ nonpublic, current lease data in its recommendations, limits it to data at least a year old, and puts a court-appointed monitor on the company. That is the ground the complaint is standing on. The case will turn on which of those two descriptions fits a tool McDonald’s has not publicly explained.
McDonald’s Has Been in This Courtroom Before
The suit was filed in Chicago, inside the Seventh Circuit. In 2023 that appeals court revived a lawsuit over the no-poach clause McDonald’s wrote into its franchise contracts, rejecting the idea that a restraint earns lenient treatment just because it sits in a franchise agreement. The plaintiffs argued the restraint was horizontal because McDonald’s runs its own restaurants alongside its franchisees, and the court said the trial judge had dropped the per se rule too early. The Supreme Court declined McDonald’s appeal in March 2024, and the case was dismissed by agreement last December after the company had already abandoned the clauses.
That structure has not changed. McDonald’s still operates about 5 percent of its U.S. restaurants itself, and the new complaint targets pricing across franchised and company-owned locations alike. The company that supplies the recommendations also competes with the restaurants receiving them.
“Optional” Is Doing a Lot of Work
The company’s own numbers cut both ways. CEO Chris Kempczinski has said only 60 to 65 percent of operators followed its pricing recommendations on the $3-and-under menu, which suggests franchisees really can say no. But this year McDonald’s added value metrics to its franchising standards and now rates operators on their use of company tools, and the complaint says franchisees are required to use the pricing consultant, Deloitte, according to Nation’s Restaurant News. A tool you are graded for ignoring is optional in a narrow sense.
These are the same operators McDonald’s has asked to spend roughly $800,000 a restaurant on its “Next” overhaul. Their leverage over corporate is not at a high.
What We Think
We are not going to predict a ruling. We do think McDonald’s has picked the wrong fight. In 2024 its U.S. president published a letter acknowledging that the average menu item cost about 40 percent more than in 2019. Customers noticed before the lawyers did.
The fix is not complicated. McDonald’s could say, in one sentence, whether one franchisee’s current sales data ever feeds another franchisee’s recommended price.
If the answer is no, the case gets much harder.
If the answer is yes, the RealPage decree is the template, and McDonald’s could adopt it tomorrow.
It wrote a fact sheet about AI instead.