Key Takeaways:
A group of California drivers sued BP, Marathon Petroleum, Walmart and four other gas station operators Monday, accusing them of using an artificial intelligence tool to illegally boost pump prices by as much as 30 cents a gallon.
"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 proposed class action, filed in federal court in Sacramento, alleges the companies violated California's Cartwright Act and Assembly Bill 325 — a law that took effect Jan. 1 targeting algorithmic price-fixing — by using a pricing tool from Kalibrate that coordinates prices across competing stations. Each penny per gallon costs California drivers an extra $134 million a year, the complaint said, with prices sometimes reaching $7 a gallon. Californians already pay the nation's highest gas prices, averaging $5.58 a gallon for regular versus $3.93 nationally, according to AAA.
The lawsuit targets more than 1,700 stations across the state operated by the defendants, including 1,000 ARCO stations, 400 Circle K locations and 25 Walmart or Sam's Club fueling stations. Kalibrate is also named as a defendant. The suit seeks unspecified damages for drivers who overpaid, and comes as regulators increasingly scrutinize the use of AI-driven pricing algorithms across retail sectors.
The complaint specifically cites Kalibrate's "restoration" feature, which it says allows most stations in a market to simultaneously implement large price increases. The tool requires participating stations to share cost and volume data with Kalibrate, which then makes pricing recommendations that the plaintiffs argue effectively eliminate competition.
AB 325, signed into law in 2025, prohibits the use of common pricing algorithms to "restrain trade or commerce." The California attorney general has not yet commented on whether the state plans to join the private action.
The defendants either declined to comment or did not immediately respond to requests for comment. Kalibrate's parent company, Knowledge Support Systems, also did not respond.
The case adds to a growing body of litigation challenging algorithmic pricing across industries, from rental housing to hotels, as regulators and plaintiffs' lawyers test the boundaries of antitrust law in an era of AI-driven commerce.
This article is for informational purposes only and does not constitute investment advice.
