BP, 7-Eleven, and Walmart are among a group of retailers sued this week for allegedly using artificial intelligence to spike gas prices in California. The class action, filed on behalf of state drivers, targets companies operating over 1,700 gas stations, including Albertsons. Fast Company reported the suit was filed in federal court in Sacramento on Monday, with Bloomberg first breaking the story.
At the center of the case is Kalibrate's AI fuel pricing tool, which the businesses employ to set prices at the pump. The lawsuit claims the software uses shared data to “coordinate high prices and wring more money from the pockets of consumers,” according to Reuters. The suit alleges violations of California’s Cartwright Act antitrust law and Assembly Bill 325, which specifically prohibits algorithmic price fixing.
California has some of the nation’s highest fuel prices, with regular gasoline averaging $5.56 per gallon on Tuesday, compared to the national average of $3.92, according to AAA. U.S. gas prices have recently hit a record high, rising as much as 50% since the war with Iran began, the article noted. The alleged coordination comes at a time when consumers are already feeling significant pain at the pump.
This case marks a major test for California's recent algorithmic pricing law, which is one of the first of its kind in the nation. If successful, it could set a precedent for how antitrust regulators view AI-driven pricing across retail sectors. The suit argues that these tools effectively serve as a digital cartel, replacing traditional phone calls with software-based collusion.
Founders of Kalibrate, which was not named as a defendant, have not commented. The companies named in the suit have not yet issued public statements. The case is likely to draw attention from federal regulators already scrutinizing algorithmic pricing in housing and other markets.