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A massive new class-action lawsuit in California alleges that fuel pricing has been rigged behind the scenes by artificial intelligence
According to Reuters, the lawsuit was filed on 22 June in the federal court in Sacramento, California. It targets some of the biggest petrol station operators and retailers in the US, including BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart, and Albertsons.
The lawsuit alleges that these operators violated the Cartwright Act, California's primary antitrust law, by outsourcing their fuel pricing strategy to an artificial intelligence tool developed by a company called Kalibrate.
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Image via Engin Akyurt/PexelsInstead of competing naturally in the open market, the petrol stations allegedly used the AI software to set artificially high fuel prices
The results for consumers have been costly: the lawsuit claims that stations using the Kalibrate AI tool inflated their fuel prices by up to USD0.30 per gallon (RM1.53 per litre) compared to outlets that set their prices independently. Californians pay the nation's highest fuel prices, averaging USD5.58 per gallon (RM6.06 per litre). The national average is USD3.93 per gallon (RM4.27 per litre).
The ultimate goal, the lawsuit claimed, was to coordinate higher prices and extract more money from consumers.
"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 gasoline price is artificially high," the complaint states.
This isn't a small-time legal dispute
The lawsuit seeks unspecified damages for drivers who overpaid for fuel. The final ruling could affect more than 1,700 petrol stations across California.
If successful, the case could set a massive legal precedent for how corporations may use algorithmic and AI-driven software to price everyday consumer goods.
