McDonald’s class action lawsuit overview:
- Who: An Illinois consumer has filed a class action lawsuit against McDonald’s USA LLC and McDonald’s Corporation.
- Why: The plaintiff alleges McDonald’s used a centralized algorithmic pricing system that pressured franchisees to follow its pricing recommendations.
- Where: The McDonald’s class action lawsuit was filed in Illinois federal court.
McDonald’s is facing a class action lawsuit alleging the fast-food chain engaged in an algorithmic price-fixing scheme that caused consumers to pay more for menu items.
According to plaintiff Michael Thomas, about 95% of McDonald’s U.S. restaurants are independently owned and operated franchises that are supposed to set their own menu prices.
The McDonald’s class action lawsuit alleges that since at least 2019 the company has coordinated pricing among its corporate and franchised restaurants through a centralized machine learning pricing engine.
The complaint claims the pricing engine collects nonpublic sales and pricing data from McDonald’s restaurants and uses that information to generate recommended menu prices for individual locations. It alleges the system allows one restaurant’s price increases to influence pricing recommendations at competing McDonald’s locations.
Thomas says he regularly purchased McDonald’s menu items and noticed different prices for the same items at nearby restaurants. He alleges he paid supracompetitive prices as a result of the alleged pricing system.
Franchisees pressured to follow pricing tool, lawsuit claims
According to the class action lawsuit, McDonald’s has significant leverage over franchisees because it controls franchise renewals and opportunities for restaurant expansion.
The complaint alleges McDonald’s has tracked franchisees’ deviations from the pricing engine’s recommendations and considered pricing compliance when evaluating franchisees.
The price-fixing lawsuit also points to McDonald’s acquisition of artificial intelligence (AI) company Dynamic Yield in 2019. It alleges the company subsequently developed and used an AI platform that collected transaction data and generated pricing recommendations across franchise and corporate restaurants.
McDonald’s allegedly receives transaction-level sales information from franchisees through its required point-of-sale system. The complaint says the system transmits sales, transaction and product-mix information to McDonald’s, which has independent access to the data.
Thomas claims the alleged pricing scheme resulted in higher prices for consumers. The McDonald’s class action lawsuit points to a company statement indicating average menu prices increased approximately 40% between 2019 and 2024 and alleges the company’s strategic menu price increases contributed to higher profits.
The proposed nationwide class includes individuals who purchased menu items at McDonald’s restaurants, while an Illinois subclass would cover Illinois residents who made such purchases. The complaint estimates there could be millions of class members.
The price-fixing lawsuit asserts claims under the Sherman Act, Illinois Antitrust Act and Illinois Consumer Fraud and Deceptive Business Practices Act. Thomas seeks damages, including treble damages, restitution, attorneys’ fees and injunctive relief.
Earlier this year, McDonald’s faced a lawsuit claiming it misleads consumers into believing its McRib sandwich contains actual rib meat.
What do you think about the allegations of price-fixing at McDonald’s? Let us know in the comments.
The plaintiff is represented by Derek Y. Brandt and Larkin Turner of Clarkson Law Firm P.C.
The McDonald’s class action lawsuit is Thomas v. McDonald’s USA LLC, et al., Case No. 1:26-cv-12149, U.S. District Court for the Northern District of Illinois.
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