(NewsNation) – A coalition of motorists in California has initiated legal action against several major fuel companies, claiming they have relied on artificial intelligence to artificially inflate gas prices.
The federal lawsuit, presented in Sacramento, targets an array of industry giants including BP, Circle K, 7-Eleven, Walmart, Marathon Petroleum, and Albertsons. These companies allegedly utilized an AI-driven software from Kalibrate—a co-defendant in the case.
As outlined in the lawsuit, this software gathers competitive pricing information from nearby stations and suggests price settings.
Lawsuit alleges tool let companies’ prices move higher together
The complaint further contends that the shared use of this technology allowed these companies to collectively raise prices. In regions where the tool is prevalent, gas rates reportedly surged by up to 30 cents per gallon. Collectively, the defendants oversee more than 1,700 fuel outlets throughout California.
The complaint argues that relying on the same algorithm violates California’s Cartwright Act, the state’s main antitrust law.
“While families struggle to afford the commute to work, defendants have conspired to put an end to competition, joining an AI-powered trust to ensure that no matter where a driver turns, the price for gasoline is artificially high,” the complaint said.
Suit claims prices pushed to ‘astronomical’ levels
According to the complaint, every penny added to the price at the pump costs California drivers roughly $134 million a year statewide.
The suit said that’s helped push prices to “astronomical” levels, with some areas seeing gas top $7 a gallon.
California already has the highest average gas prices in the country.
The lawsuit could become one of the first major tests of “smart pricing” as more industries lean on AI tools to set prices.