McDonald’s Facing Antitrust Lawsuit Over Alleged Use of Algorithm to Set ‘Optimized’ Menu Prices Nationwide

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A proposed class action lawsuit alleges that McDonald’s has had in place for years an unlawful price-fixing agreement whereby its restaurants set “optimized” menu prices based on non-public pricing data fed into an algorithm, causing consumers already stretched thin financially to pay higher prices “because a machine has calculated that they probably can.”

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The 31-page McDonald’s lawsuit says that roughly 95 percent of the around 14,000 McDonald’s restaurants in the United States are owned by independent franchisees, which are individuals or separate legal entities apart from McDonald’s corporate. The suit claims that although the fast food giant has for decades represented that independent franchisees in the U.S. set their own prices and effectively compete with each other for the same customers, the burger behemoth has since at least 2019 replaced its independent pricing mandate with a shared pricing tool. According to the suit, the tool vacuums up pricing data from corporate and franchised locations alike, amounting to millions of daily transactions, to set menu prices algorithmically.

The antitrust lawsuit alleges that McDonald’s centralized, machine-learning “pricing engine” not only recommends menu prices that cover operating costs but estimates “how much each restaurant’s likely customers are willing to pay” and gauges “how sensitive its likely customers are to prices”—all based on nonpublic data from competing restaurants. The case adds that the McDonald’s algorithm is programmed with rules “tying one restaurant’s price increases to whether other McDonald’s restaurants have already raised prices on the same item.” 

The suit claims that independent McDonald’s franchisees are “heavily pressured” by corporate to use algorithmic menu pricing, and those that “stray” from the shared pricing model allegedly “face losing the significant investments they have made in their restaurants.” The lawsuit says that McDonald’s enforces the apparent price-fixing agreement by tracking “in detail” franchisees’ deviations from the pricing engine’s recommendations, following up with operators who do not use the algorithm, and telling investors that “pricing non-compliance” factors into decisions about whether a franchisee may be considered for renewal or expansion.

“Franchisees’ authorization to continue operating their stores, expand the number of stores they operate, and ultimately renew their stores at the expiration of the franchise agreement is dependent on their level of compliance with McDonald’s-mandated business policies, practices, and procedures,” the suit summarizes. 

Although the terms of service for McDonald’s pricing system warn that users “may be competitors of each other and must comply with the antitrust laws,” the fast food giant and its franchisees have instead “colluded to fix prices for consumers,” marking an allegedly unreasonable restraint of trade with “no legitimate procompetitive objective,” the lawsuit claims. 

“Plaintiff and the Class members 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 class action lawsuit states, noting that McDonald’s average menu prices have risen roughly 40 percent from 2019 to 2024. 

According to the complaint, McDonald’s alleged algorithmic price-fixing first came to light after a 2023 viral social media post featured an $18 Big Mac meal at a Connecticut location. In 2024, the franchisee of that location alleged that the $18 price tag for the meal was recommended by “industry standard advisors,” which the suit indicates is a reference to McDonald’s pricing tool. 

The proposed class action lawsuit was filed after a September 2026 Reuters report revealed McDonald’s increasing use of AI to guide menu prices in the U.S. and in some global markets. 

The McDonald’s algorithm lawsuit looks to cover all individuals in the United States who bought menu items at a McDonald’s restaurant, whether operated by McDonald’s itself or by a franchisee. 

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