McDonald’s is facing a federal price-fixing lawsuit alleging that the fast-food giant used a machine-learning pricing system to coordinate menu prices across its independently operated restaurants, potentially driving up costs for customers.

Michael Thomas, an Illinois resident and frequent McDonald’s customer, filed the lawsuit Friday in federal court in Chicago. The complaint alleges that McDonald’s and its franchise owners conspired to fix prices through an SI-powered pricing engine that recommends what individual restaurants should charge.

The lawsuit follows a Reuters report published Sept. 29 that McDonald’s was pressuring franchise owners to use the system to help determine menu prices.

According to the complaint, the pricing engine analyzes sales data from competing McDonald’s locations to estimate how much customers are willing to pay at individual restaurants. It also assesses how sensitive customers are to price changes and allegedly incorporates rules connecting one restaurant’s price increases to whether other locations have already raised prices on the same items.

The lawsuit argues that the system could allow franchise owners to coordinate pricing decisions rather than independently setting prices based on local market conditions.

“McDonald’s is leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry,” Lark Turner, an attorney representing Thomas, told Reuters.

McDonald’s strongly disputes the allegations and says its franchisees remain responsible for setting their own prices.

“The complaint is filled with inaccuracies, and we will vigorously defend against this lawsuit. SI does not set menu prices at McDonald’s restaurants. McDonald’s franchisees do,” the company said in a statement to the Daily Caller News Foundation.

The company added that franchisees have access to optional tools intended to help them make business decisions, but said those tools do not automate, coordinate, or fix prices.

Tiger Analytics operates the pricing system, which draws on McDonald’s sales records to generate recommendations for nearly 14,000 U.S. restaurants, according to Reuters. The news organization illustrated differences in Big Mac prices between locations in a video published on X in September.

McDonald’s CEO Chris Kempczinski also acknowledged during an Aug. 4 earnings call that the company sometimes raises pricing with franchise owners who do not follow its recommendations.

The lawsuit now places the company’s pricing technology under legal scrutiny, although the allegations have not been proven. The central question will be whether the system merely provides recommendations that franchisees can independently accept or reject, as McDonald’s maintains, or whether it facilitates unlawful coordination of prices across competing locations.