Major U.S. gas station operators, including BP, Marathon Petroleum, 7-Eleven, Circle K, Walmart, and Albertsons, are facing a proposed class-action lawsuit in California over allegations that they used AI-powered pricing software to illegally coordinate gasoline prices. The lawsuit claims the companies relied on software developed by Kalibrate to share pricing data and reduce competition, resulting in higher fuel prices for consumers. The defendants have either denied wrongdoing or declined to comment, and the allegations have not been proven in court.
According to the complaint, Kalibrate's AI system analyzes competitors' pricing and market data to recommend fuel prices, allegedly encouraging stations to avoid undercutting one another. Plaintiffs argue that this effectively enabled algorithmic collusion rather than independent pricing decisions, causing gasoline prices in some parts of California to increase by as much as 30 cents per gallon. The lawsuit contends that even a one-cent increase translates into millions of dollars in additional annual costs for California drivers.
The legal action is one of the first major cases brought under California Assembly Bill 325, which took effect in 2026 and clarifies that state antitrust laws apply to algorithmic price-fixing. The case reflects growing scrutiny of AI-powered pricing tools across industries, following similar concerns about the use of algorithms in rental housing, groceries, and other consumer markets. Regulators are increasingly examining whether AI systems can facilitate anti-competitive behavior even without explicit agreements between competitors.
The lawsuit seeks financial compensation for consumers who allegedly overpaid for fuel and asks the court to stop the use of AI-driven pricing practices that violate antitrust laws. The outcome could have significant implications for businesses that use AI to optimize pricing, potentially setting an important legal precedent for how algorithmic pricing systems are regulated in the United States.
