A shocking new lawsuit has revealed alleged price-fixing by major fuel station operators in California, using sophisticated artificial intelligence (AI) to inflate petrol prices at the pump. At the heart of the complaint is an accusation that multinational giants like BP and 7-Eleven, alongside others such as Circle K, Marathon, Walmart, and Albertsons, employed an AI-based tool supplied by Kalibrate to coordinate pricing strategies. This purported 'AI-powered trust' allegedly resulted in price increases of up to 30 cents per gallon in areas with a high concentration of stations utilising the technology.
The proposed class action, filed in a Sacramento federal court, alleges that the defendants violated California's primary antitrust legislation, the Cartwright Act, as well as Assembly Bill 325 – a new law designed to address algorithmic price fixing. The lawsuit claims that Kalibrate's AI tool used data from rival stations to facilitate this alleged coordination, contributing to what the complaint describes as 'astronomical' petrol prices, sometimes reaching as high as $7 per gallon.
For Californian drivers, each penny increase is estimated to cost an additional £10 million annually (£134 million), exacerbating already-high petrol prices. The lawsuit claims that families are being unfairly penalised by artificially inflated fuel costs while grappling with the rising cost of living and commuting. It's alleged that the defendants collectively operate over 1,700 fuel stations across California, effectively creating a pricing stranglehold on consumers.
This case highlights growing global concerns about AI misuse in commercial practices, particularly in pricing. While AI offers potential for efficiency and dynamic pricing models, its application must be mindful of existing and evolving antitrust laws. The outcome of this lawsuit could have far-reaching implications, influencing regulatory frameworks not just in the US but also in the UK and EU.
For UK businesses, this case is a stark reminder of the risks associated with deploying AI in pricing strategies. As the regulatory landscape evolves, companies must ensure that their use of AI adheres to antitrust laws, protecting consumers from unfair price-fixing practices.