California Gas Prices Under Fire: Lawsuit Targets AI-Powered Pricing Software

A federal class-action lawsuit has been filed in California, accusing an AI pricing software company and its customers of violating anti-trust laws. The lawsuit claims that Kalibrate Fuel Pricing, used by gas stations to set competitive prices, has led to artificially high fuel prices in the state. About a dozen station operators that use the software are also named as defendants. The software collects and compares non-public pricing and sales figures from participating stations, allowing them to set the highest possible price. The plaintiffs allege that this cooperative price adjustment has resulted in a 4.5 percent increase in fuel prices. California already has the highest gas prices in the country, partly due to high state gas taxes. The lawsuit argues that every one-cent increase in prices means an extra $134 million in fuel costs annually for California fuel purchasers. The case is based on a recent amendment to California's anti-trust law, which adds language specific to the use of common pricing algorithms. The plaintiffs claim that Kalibrate's software has a 'restoration' feature that allows station operators to initiate or join a coordinated price hike, effectively resetting prices. The lawsuit also alleges that Kalibrate has shared non-public proprietary pricing information from its customers with prospective clients. As the case unfolds, it will be interesting to see how the court rules on the use of AI-powered pricing software and its impact on gas prices in California.