Lawsuit alleges McDonald's uses AI 'pricing engine' to set menu prices; company denies using AI to gauge what individual customers will pay

The puzzle is the denial, or rather, the question it answers. As CNBC summarizes the complaint, an AI-powered "pricing engine" sets menu prices across McDonald's U.S. locations and overcharges customers for Big Macs and fries ^[1][2]. McDonald's denied using AI to determine what individual customers are willing to pay ^[3]. Those are different practices. "Dynamic pricing responds primarily to market conditions, whereas personalised pricing uses information about the consumer to estimate willingness to pay," said Miroslava Marinova, a University of East London senior lecturer in commercial law, in remarks to CNBC ^[11]. On her definitions, the allegation as reported describes the first practice and the denial rebuts the second.

The report does not name the plaintiffs, the court or the damages sought ^[1]. On the grocery side, CNBC names seven chains running electronic shelf labels in the U.S. and U.K. ^[17]. Two of them, Walmart and Kroger, have said publicly that they do not use dynamic or surge pricing to set individualized prices ^[8]. The other five, Amazon Fresh, Whole Foods, Tesco, Morrisons and Asda, did not immediately respond when CNBC asked about their use of AI ^[16][18]. Kroger's disclosed AI use moves prices down, marking down perishables near the end of their shelf life ^[7].

Marinova and the Bank of England economists Clare Lombardelli and Rupal Patel put the risk in the data. Tools such as shelf labels and facial-recognition checkout change how much information companies can collect, from transaction histories to location, they noted ^[13]. In April, Lombardelli and Patel said more sophisticated technology could see more firms charging "as close to the maximum price a consumer is willing to pay for a good or service," which they called "perfect price discrimination" ^[14].

If a court accepts that franchisees set their own prices using McDonald's recommendations ^[4], the case stays inside the franchise model. If it treats the engine's output as the price, the theory reaches past franchising to other chains that compute prices centrally. We think the nearer cost for grocers is state law already on the books: New York's disclosure requirement for prices set with personal data, and Maryland's restriction on personalized pricing by food retailers and delivery services ^[9][10]. That view is wrong if the complaint turns out to rest on customer data. Then McDonald's denial is on point, and the suit lands on the practice Marinova says is merging with ordinary repricing. "As retailers combine market-level information with increasingly detailed consumer data, the boundary between dynamic and personalised pricing becomes thinner," she said ^[12].