Class-Action Lawsuit Blames AI for Causing Gas Price Inflation in California

A class-action lawsuit was filed against AI-powered gas pricing company Kalibrate and its client gas station operators on May 21, 2024, alleging anti-trust violations in California. The lawsuit claims that Kalibrate's AI software artificially inflates gasoline prices, thereby harming consumers. Plaintiffs assert that Kalibrate's algorithms enable gas stations to coordinate price increases without explicit collusion, a practice that allegedly violates California's Cartwright Act, which prohibits agreements that restrain trade. The suit specifically points to the use of AI in dynamic pricing strategies as the mechanism for this alleged price fixing. This legal action represents one of the first major challenges to the use of AI in setting prices for essential goods, raising significant questions about algorithmic collusion and its impact on market competition. The plaintiffs are seeking damages and injunctive relief to prevent further alleged price manipulation. The lawsuit was filed in the U.S. District Court for the Northern District of California.