California drivers on Monday brought a proposed class action in federal court in Sacramento accusing a group of petroleum retailers and a software vendor of using artificial intelligence to push up prices at the pump.
The complaint names as defendants BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart and Albertsons, along with Kalibrate, the company that provided the AI-based pricing tool. Plaintiffs allege the tool leverages data from competing stations to "coordinate high prices and wring more money from the pockets of consumers," effectively removing normal competitive forces, and therefore violates the Cartwright Act, California's principal antitrust statute.
Plaintiffs also assert that the conduct runs afoul of Assembly Bill 325, a California law that went into effect on January 1 and which was designed to address algorithmic price fixing. The lawsuit asks for unspecified damages on behalf of drivers who paid allegedly inflated prices for fuel.
According to the complaint, where large shares of local stations deploy the Kalibrate tool, motorists have experienced increases as much as 30 cents per gallon. The filing includes a calculation that each one-cent increase in pump prices costs California drivers an extra $134 million per year. The complaint further states that gasoline prices in the state have at times reached levels as high as $7 per gallon, calling those prices "astronomical."
The filing portrays the alleged conduct as a systematic effort to suppress competition. "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 says.
The lawsuit says the defendants operate more than 1,700 gas stations in California. The plaintiffs point to data from AAA cited in the complaint showing California motorists pay an average of $5.58 per gallon for regular gasoline, compared with a national average of $3.93 per gallon.
Kalibrate and the retail defendants either did not immediately respond to requests for comment or declined to comment, the filing notes. The complaint sets out the allegations and legal theories but does not include any admission of wrongdoing by the companies and seeks an unspecified sum in damages on behalf of those who allegedly paid too much for gasoline.
The case centers on statutory and antitrust claims tied to algorithmic pricing practices and raises questions about how recent state law and antitrust rules apply to pricing tools used across extensive retail networks.