Major gas stations face AI price-fixing lawsuit as California drivers seek damages for inflated fuel costs

Lawsuit Accuses Gas Stations of Using AI to Jack Up Fuel Prices in California

Omar Gallaga has covered technology, digital culture and other topics for outlets including CNET, NPR, WIRED, Texas Monthly, MSNBC, Consumer Reports, The Washington Post, the Los Angeles Times, The Atlantic and the Austin American-Statesman, where he was a longtime tech reporter, editor and podcaster. He lives in the Texas Hill Country. Californians who've felt the pinch of average gas prices as high as $6 to $7 a gallon in recent months may have some eventual recourse if a proposed class action lawsuit goes through. The lawsuit, filed on June 22 in the Eastern District of California, accuses several major gas station operators of manipulating pump prices by using AI-driven pricing software from Kalibrate Fuel Systems, a tool that allegedly uses competitor data to influence fuel costs. The complaint targets more than 1,700 gas stations across the state, including BP, Walmart, Marathon Petroleum, 7-Eleven, Albertsons and Circle K. Plaintiffs argue that, where the automated software is widely used, prices rose by about 30 cents per gallon above what normal competition would have produced. The lawsuit calls it "an illegal algorithmic price-fixing scheme orchestrated by the algorithmic pricing company Kalibrate and some of the state's largest fuel retailers." California has the highest average gas prices in the country, and even small increases from pricing software can have a big impact on drivers. A representative for Kalibrate did not immediately return a request for comment. Cracking down on algorithmic price fixing According to the lawsuit, the gas companies violated California law AB 325, which went into effect earlier this year to crack down on algorithmic price fixing. AB 325 gives California plaintiffs an antitrust hook for claims that competitors used a shared pricing algorithm as part of a conspiracy to restrain trade, and it also makes it easier to plead such cases under the state's main antitrust law, the Cartwright Act. The spokesperson from the California Energy Commission's Division of Petroleum Market Oversight said the agency, which closely monitors fuel markets, has put fuel refiners, distributors and sellers on notice (PDF) about AB 325. "DPMO will continue to engage with market participants to ensure that they are familiar with their legal obligations in the Golden State," the spokesperson told CNET via email. Earlier this month, the Commission issued a warning that branded gasoline may cost significantly more than generic gas amid rising fuel prices driven by the war in Iran. The Commission was already investigating high-priced gas stations in the state. The suit names three California plaintiffs: Joel Casciani of Chula Vista; Paola Hartman of Homeland; and Crystal Turnbough of Marysville. All three say they purchased gas at inflated prices from gas stations owned by companies that use Kalibrate Fuel Pricing. It doesn't specify a dollar amount for the damages the plaintiffs are seeking, but it does call for the recovery of compensatory damages and the awarding of three times the damages caused. The suit comes just as Kalibrate recently introduced a mobile app that allows fuel retailers to set prices on their phones. According to the description, some of the features include "enhanced market insight, new mobile capabilities and AI-driven features designed to bring greater clarity to pricing decisions." Opposition to dynamic and surveillance pricing Dynamic pricing is not new. It's been a fact of life for decades since algorithms were integrated into companies' sales systems. The most public examples have been Uber's surge pricing for ridesharing and ticket pricing among airlines. Recently, World Cup ticket prices reached record highs because they are set by demand. While many World Cup fans criticized the practice, the US Chamber of Commerce defended dynamic pricing, noting that after the initial rush, ticket prices dropped. What's changed in recent years is that companies now have much more data about their customers and, with the help of AI, can set prices based on what they know, a practice called surveillance pricing. While dynamic pricing is based on demand, competition or local market conditions, surveillance pricing means a company uses personal data about a shopper to determine what price that shopper is likely to pay. The state of New York passed a law restricting surveillance pricing in December, which went into effect recently. California lawmakers have also been moving to restrict surveillance pricing, with AB 2564 aiming to ban retailers from setting prices based on personal information. Many digital rights and privacy activists support the proposed ban, including the Electronic Frontier Foundation, which says that "surveillance pricing is bad for privacy, equity and price transparency. "

California drivers accuse gas station operators of using AI to boost pump prices -- lawsuit seeks damages for antitrust violations

Several operators are being sued for using Kalibrate's AI tool to coordinate prices with local competitors. Californians pay the highest gas prices in the U.S., and a proposed class action says that the issue has been exacerbated by an AI tool that smartly squeezes customers for the best profits. A newly filed lawsuit at the Sacramento, California, federal court says that gas station operators are using Kalibrate's AI tool, which uses data from nearby competing gas stations, to drive up prices by as much as 30 cents a gallon in some areas, reports Reuters. On Monday, gas station operators including BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart, and Albertsons were named as defendents in the headlining class action, alongside Kalibrate. By implementing the AI-driven price-optimizing tool, these operators have allegedly violated the Cartwright Act, California's main antitrust law, as well as Assembly Bill 325. The latter is a California law that was put in place at the start of 2026 to crack down on algorithmic price fixing. An open-and-shut case, then? Looking at the numbers, it is easy to understand why the Californians have been spurred into legal action. AAA figures suggest that California residents pay an average of $5.58 per gallon for regular, which is already much higher than the $3.93 national average. Where Kalibrate's AI tools are used to adjust gas pricing, pump prices have risen as much as 30 cents per gallon, say the complaints. The result is some operators charging as much as $7 a gallon, notes the source report. Gas station operators "have conspired to put an end to competition" The key compelling argument behind this class action is quoted by Reuters from the case files. "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," says the complaint. Currently, it is easy to argue that the rise of AI hasn't fulfilled its early promises. Sifting through our headlines, it has sparked the RAMpocalypse, and other key PC components like SSDs and GPUs have also been impacted by AI server demand. Moreover, we have seen huge environmental impacts from those AI servers straining infrastructure that is sometimes already under pressure, like electricity generation and water resources. They also cause heat and noise pollution, so people don't want to be anywhere near them. Then there are the applications we have seen AI used for, thus far. Instead of cancer cures and smart government, we've got higher gas prices and divisive social media bots. The complainants are seeking unspecified damages. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

BP, Marathon, 7-Eleven, Walmart sued for allegedly using AI to boost California gas prices

June 22 (Reuters) - Gas station operators including BP (BP.L), opens new tab, Circle K (ATD.TO), opens new tab, Marathon Petroleum (MPC.N), opens new tab, 7-Eleven (3382.T), opens new tab, Walmart (WMT.O), opens new tab and Albertsons (ACI.N), opens new tab were sued on Monday by California drivers who accused them of using artificial intelligence to boost prices at the pump. 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." 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. 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. 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. Californians pay the nation's highest gas prices, averaging $5.58 per gallon for regular, according to AAA. The national average is $3.93. The lawsuit seeks unspecified damages for drivers who paid too much for gasoline. Reporting by Jonathan Stempel in New York Our Standards: The Thomson Reuters Trust Principles., opens new tab

Gas stations accused of using AI to inflate fuel prices in class-action lawsuit

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Winners & losers: Once again, AI is blamed for something else besides failing to cure cancer. A class-action lawsuit in California accuses gas-station operators of using the tech to increase prices at the pump by as much as 30 cents a gallon in some areas. The class action claims the defendants, which include BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart, and Albertsons, violated California's main antitrust law, the Cartwright Act, writes Reuters. The suit also claims the alleged conduct violates Assembly Bill 325, a state law designed to address algorithmic price fixing that took effect at the start of 2026. According to AAA, California residents pay the highest gas prices in the US, at $5.56 per gallon, considerably higher than the $3.92 national average. The complaint adds that Kalibrate's AI-powered price-optimizing tools have been used to push gas prices to levels reaching $7 per gallon. That's not far off the UK's equivalent average of around $8.10. Kalibrate is also named as a defendant in the Sacramento federal court case. The lawsuit alleges its tool used data from competing gas stations to help coordinate higher prices, and seeks unspecified damages for California drivers who allegedly overpaid. The defendants operate over 1,700 gas stations in California, with each extra penny added to the price of gas costing drivers in the state an extra $134 million per year, according to the suit. "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. There has been plenty of controversy over the use of AI to price goods and services. Back in March, it was reported that Walmart had secured two US patents this year covering automated markdowns and machine learning-based demand forecasting. This isn't a new problem, either. In August 2025, Delta Air Lines was forced to deny using artificial intelligence to set ticket prices based on individual customer data, responding to concerns raised by several members of the US Senate. The airline issued its statement following criticism from lawmakers who alleged that Delta was exploring advanced pricing models designed to tailor fares to the maximum amount each customer might be willing to pay - a practice sometimes referred to as surveillance pricing. The California case is the latest incident likely to increase anti-AI sentiment. From job losses and data center construction to an internet filled with slop, the technology isn't being hailed as the miracle that many executives expected. But while just 16% of Americans think AI will benefit society, chatbot use among US adults has climbed to an all-time high of 49%.

Suit Alleges That Gas Stations Use AI to Hike Gas Prices

A new lawsuit filed on Monday in Sacramento, California, proposed as a class action, accuses BP, 7-Eleven, Walmart, Albertsons, and other gas station chains operating in California -- along with a software platform -- of using AI to "coordinate high prices and wring more money from the pockets of consumers," according to Reuters, who reviewed the suit. Reuters says the software in question is Kalibrate, one of the defendants, and a company whose website says it has "been removing the guesswork and adding certainty to organizations' biggest decisions for decades," and that it offers, "Market-leading AI, analytics, and modeling." In California, using AI to collaboratively set prices could be the basis for a valid lawsuit. Elsewhere, it might not be. That's because a 2025 amendment to a California's primary antitrust law makes algorithmic price fixing illegal. Specifically, no one may "use or distribute a common pricing algorithm as part of a contract, combination in the form of a trust, or conspiracy to restrain trade or commerce[...]" And what exactly is a "pricing algorithm"? California law defines it as "any methodology, including a computer, software, or other technology, used by two or more persons, that uses competitor data to recommend, align, stabilize, set, or otherwise influence a price or commercial term." That amendment took effect on January 1 of this year. Reuters says the plaintiffs in the suit are "California drivers." Gizmodo sought comment from Kalibrate, BP, 7-Eleven, Walmart, and Albertsons, but did not immediately receive replies. We will update this article if we hear back.

BP, Walmart and 7-Eleven sued over AI-set petrol prices in California

A federal complaint accuses six fuel retailers of leaning on a shared pricing algorithm to keep prices at the pump high. A group of California drivers has sued six of the country's biggest fuel retailers, accusing them of using an artificial-intelligence pricing tool to coordinate the cost of petrol and keep it artificially high. The complaint, filed on 22 June 2026 in federal court in Sacramento, names BP, Circle K, Marathon Petroleum, 7-Eleven, Walmart, and Albertsons as defendants. According to the complaint, the chains all fed data into the same algorithmic pricing software, supplied by a firm called Kalibrate, which the plaintiffs say draws on competitors' prices to recommend what each station should charge. The drivers allege that the practice amounted to a coordination scheme that lifted prices in step rather than through ordinary competition. The numbers attached to that allegation are not small. In areas where a high share of stations used the tool, the plaintiffs claim, petrol prices rose by roughly 30 cents per gallon compared with what competitive pricing would have produced. The six companies between them operate more than 1,700 filling stations across the state, which gives any nudge to their pricing a wide reach, Bloomberg first reported. The defendants span the major-brand forecourts, convenience chains, and supermarket fuel stations that together account for a large slice of where Californians actually buy petrol, which is part of why the plaintiffs argue the alleged effect was felt so widely. The suit leans on two pieces of California law. The first is the Cartwright Act, the state's main antitrust statute, which bars agreements that restrain trade. The second is newer: Assembly Bill 325, which took effect earlier this year and was written specifically to police algorithmic pricing. The plaintiffs argue that feeding rivals' data into a shared tool is exactly the kind of behaviour the new law was meant to catch, even where no executive ever sat in a room agreeing on a price. That theory is at the centre of a broader legal argument now playing out across several US markets, from rental housing to hotel rooms: whether software that quietly aligns the decisions of competitors can break antitrust rules without the human handshake those rules were originally written to police. Regulators have grown warier as AI moves deeper into commerce, and the California case puts a familiar product, petrol, at the heart of the question. The plaintiffs are seeking unspecified damages. The filing does not put a dollar figure on the alleged harm, leaving that to be argued as the case proceeds. The defendants have not yet responded in court, and the allegations remain unproven. Kalibrate is described in the complaint as the supplier of the pricing tool rather than as a defendant, and the case is framed as a proposed class action on behalf of drivers who bought fuel at the named stations. California has long been one of the most expensive places in the US to fill a tank, a fact usually pinned on state taxes, environmental rules, and a relatively isolated network of refineries. The lawsuit adds a software layer to that explanation, arguing that some of the gap reflects coordinated pricing rather than the usual structural costs. For now, the practical questions sit with the court. The companies will need to file responses, and the plaintiffs will have to show that a shared tool produced something the law treats as coordination rather than independent firms reaching similar conclusions from similar data. How a judge in Sacramento draws that line could shape how far the new statute reaches well beyond the forecourt.

California drivers sue gas stations for allegedly using AI to inflate prices

Firms including BP and 7-Eleven accused of coordinating prices to 'wring more money from pockets of consumers' Gas ⁠station operators including BP, Circle K, Marathon, 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. 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". The lawsuit in the Sacramento federal court said the scheme violated assembly bill 325, a California law that took effect on 1 January and was intended to crack down on algorithmic price fixing. 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 $134m 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. 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. Californians pay the nation's highest gas prices, averaging $5.58 per gallon for regular, according to AAA. The national average is $3.93. The lawsuit seeks unspecified damages for drivers who paid too much for gasoline.

California Consumers Sue Gas Stations Over AI Price Fixing | PYMNTS.com

The companies, which collectively operate more than 1,700 filling stations across California, used an algorithm from Kalibrate Fuel Systems that automatically adjusted prices based on shared confidential data, according to the complaint. The suit alleges the tool inflated gasoline prices by as much as 22 cents a gallon and diesel by 33 cents a gallon, on top of prices that had already reached above $7 a gallon in some areas during the U.S. conflict with Iran. Every additional penny a gallon costs California drivers approximately $134 million a year, according to the complaint. The case is among the first brought under AB 325, a California law passed last year that prohibits the use of shared pricing algorithm, Bloomberg reported. It seeks damages under California antitrust law for drivers who overpaid for fuel. In May, California's fuel watchdog, The Division of Petroleum Market Oversight, an independent agency within the California Energy Commission, issued subpoenas to some station owners over elevated prices, Bloomberg reported. The lawsuit reflects a legal theory regulators have been developing 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 constitute a hub-and-spoke conspiracy -- a legal theory in which a central actor coordinates competitors without direct contact between them -- even without direct communication between the companies involved. DOJ officials have said that algorithmic systems generate extensive digital records -- logs, timestamps and data trails that can strengthen rather than complicate prosecution. 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 have moved to get ahead of that dynamic. PYMNTS reported that more than 60 bills targeting algorithmic pricing are pending across more than half of U.S. states, and that antitrust enforcers are focusing on the potential for shared pricing systems to facilitate coordination among competitors even without explicit collusion. The outcome of the case could carry implications beyond the fuel sector. Kalibrate's tool is used across thousands of stations nationally, and the legal theory underlying the complaint -- that a shared AI pricing platform enables unlawful coordination among competitors -- applies to any industry where multiple companies rely on the same algorithm to set prices.