California Lawsuit Targets BP, 7-Eleven, Walmart for Alleged AI Gas Price Fixing
California Drivers Accuse Major Gas Stations of AI-Driven Price Manipulation
By Jonathan Stempel
Overview of the Lawsuit
June 22 (Reuters) - Gas station operators including BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart and Albertsons were sued on Monday by California drivers who accused them of using artificial intelligence to boost prices at the pump.
Alleged Violation of Antitrust Laws
According to a proposed class action, the defendants violated California's main antitrust law, the Cartwright Act, by using an AI-based tool that uses data from competing gas stations to "coordinate high prices and wring more money from the pockets of consumers."
Details of the Alleged Scheme
The lawsuit in the Sacramento, California federal court said the scheme violated Assembly Bill 325, a California law that took effect on January 1 and was intended to crack down on algorithmic price fixing.
Impact on Gas Prices and Consumers
Drivers said gas prices have risen as much as 30 cents a gallon in areas where high percentages of stations use the AI tool, which comes from a company called Kalibrate.
Each penny costs California drivers an extra $134 million per year, boosting gasoline prices to "astronomical" levels sometimes reaching $7 a gallon, the complaint said.
"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.
Defendants and Their Response
The defendants operate more than 1,700 gas stations in California, according to the complaint. Kalibrate is also a defendant. The defendants either did not immediately respond to requests for comment or declined to comment.
California Gas Prices in Context
Californians pay the nation's highest gas prices, averaging $5.58 per gallon for regular, according to AAA. The national average is $3.93.
Lawsuit Seeks Damages
The lawsuit seeks unspecified damages for drivers who paid too much for gasoline.
(Reporting by Jonathan Stempel in New York)
