Lawsuit: AI Contributing to 'Artificially High' Gas Prices

A group of California drivers says gas prices didn't just creep up—they were pushed there by algorithms. In a proposed class-action lawsuit filed in federal court in Sacramento, motorists accuse major operators including BP, Circle K, Marathon, 7-Eleven, Walmart, Albertsons, and software firm Kalibrate of using an AI-based pricing tool to align prices and undercut competition in violation of state antitrust law, Reuters reports. California already has the nation's highest average gas price at $5.58 a gallon, versus a $3.93 national average, but drivers say the companies are trying to "wring more money from the pockets of consumers."

The suit claims Kalibrate's software draws on competitors' data to push pump prices "artificially high," allegedly adding up to 30 cents per gallon in areas where it's widely used and contributing to regular gas topping $7 in some spots. The lawsuit finds a footing in California as Assembly Bill 325, which took effect January 1, targets pricing algorithms that use "competitor data to recommend, align, stabilize, set, or otherwise influence a price or commercial term," per Gizmodo. The companies collectively run more than 1,700 stations in the state. The drivers are seeking unspecified damages for what they argue are illegally inflated costs.