Gas giants use AI to raise prices, lawsuit says, another algorithmic hit to COL (www.latimes.com)

A federal lawsuit has been filed in California, accusing major gas retailers like Walmart and 7-Eleven, along with technology firm Kalibrate, of using AI software to artificially inflate gas prices. This case is significant as it tests California's updated antitrust laws that now classify algorithm-driven pricing practices as potential price-fixing, reflecting growing concerns about the implications of AI and algorithm usage in maintaining high living costs. With gas prices averaging $5.46 per gallon, the lawsuit highlights the broader scrutiny on corporate pricing strategies during a time of economic strain for consumers. At the heart of the allegations is Kalibrate's AI-powered pricing software, which is claimed to encourage gas stations to share private pricing data, allowing them to set prices collaboratively and keeping them above competitive levels. Research cited in the lawsuit indicates that stations using this software have experienced average price increases of 6 cents per gallon. As more industries face scrutiny for similar algorithmic pricing practices, including real estate and grocery delivery, this case could pave the way for stricter regulations on AI applications in pricing, ultimately influencing market competition and consumer welfare.