The federal lawsuit claims major gas chains relied on an AI program that automatically pushed coordinated price adjustments directly to pumps and signs without human intervention
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A group of California residents has filed a federal lawsuit accusing several major fuel retailers of using artificial intelligence software to illegally coordinate and inflate gas prices across the state.
The complaint, filed in the U.S. District Court for the Eastern District of California, Sacramento division, alleges that the companies used pricing software developed by the technology firm Kalibrate to fix fuel costs instead of competing independently, Reuters reported.
According to the lawsuit, the software analyzes data from competing gas stations and automatically recommends price points to balance profit margins and sales volume. These adjusted prices are frequently pushed directly to pumps and store signs without human intervention.
The legal action targets 7-Eleven, Circle K, BP, Marathon Petroleum, Walmart, Albertsons and EG America, which now operates as Cumberland Farms. The lawsuit also names 10 additional unidentified gas retailers operating within California as defendants, according to C-Store Dive.
Although many of these retailers operate franchised locations, the plaintiffs claim the parent companies maintain pervasive direct and indirect control over store-level decisions.
The automated nature of the software means multiple direct competitors can use the same algorithm simultaneously, leading to coordinated pricing rather than open market competition.
The financial impact of the software varied by location. In areas where fuel retailers deployed the Kalibrate technology, the average price of gas increased by approximately six cents, according to the lawsuit. Also, as reported by Reuters, locations with a high concentration of stations using the software saw prices rise by as much as 30 cents.
According to AAA, California has the highest national gas prices, with an average of $5.54 per gallon. For comparison, the national average is $3.93.
The plaintiffs allege that the retailers violated California’s primary antitrust law as well as Assembly Bill 325, a statute that explicitly prohibits businesses from using shared pricing algorithms to coordinate costs with competitors.
“These acts represent a modern, digital iteration of traditional price-fixing and combination that California law expressly forbids,” the plaintiffs stated in the filing.
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