AI Price-Fixing Lawsuit Targets Marathon, BP, 7-Eleven

A group of California drivers filed a proposed class-action lawsuit accusing Marathon Petroleum, BP, 7-Eleven and Walmart of using an artificial intelligence pricing tool to illegally inflate gasoline and diesel prices across more than 1,700 stations in the state. The complaint, filed in federal court in Sacramento, alleges that the companies fed confidential data into an algorithm from Kalibrate Fuel Systems that automatically adjusted pump prices. The suit claims the tool added as much as 22 cents a gallon to gasoline and 33 cents a gallon to diesel, on top of prices that had already topped $7 in some areas during the U.S. conflict with Iran. Every extra penny a gallon costs California drivers roughly $134 million a year, according to the complaint.

The case is one of the first brought under AB 325, a California law passed last year that bans the use of shared pricing algorithms, Bloomberg reported. The lawsuit seeks damages under state antitrust law for drivers who overpaid. In May, California's Division of Petroleum Market Oversight issued subpoenas to some station owners over elevated prices, Bloomberg said.

The legal theory behind the suit has been taking shape for years. PYMNTS reported that the Justice Department's antitrust division has sharpened its focus on shared pricing platforms, arguing that competitors routing pricing decisions through a common algorithm can form a hub-and-spoke conspiracy – a central actor coordinates competitors without direct contact between them – even when the companies never talk to each other. DOJ officials have said that algorithmic systems generate extensive digital records, logs and timestamps that can strengthen prosecution rather than complicate it.

The California case fits that framework. Plaintiffs are not alleging that gas station operators met to fix prices. They are alleging that a shared AI tool did it for them.

State legislatures are moving to get ahead of the same dynamic. More than 60 bills targeting algorithmic pricing are pending across more than half of U.S. states, PYMNTS reported. Antitrust enforcers are focusing on the potential for shared pricing systems to facilitate coordination among competitors even without explicit collusion.

For investors tracking the defendants, the risk is not just the direct financial hit from a potential judgment. The legal theory could spread beyond fuel. Kalibrate's tool is used across thousands of stations nationally. Any industry where multiple companies rely on the same algorithm to set prices faces similar exposure. Marathon Petroleum, one of the defendants, carries an Alpha Score of 47 out of 100, reflecting mixed signals on the stock's risk-reward profile. The outcome of this case could test whether shared pricing algorithms are treated as illegal collusion, with implications for every sector that uses them.