AI Is Allegedly Being Used To Artificially Boost Fuel Prices In California

Artificial intelligence (AI) is causing quite a stir these days. It's not only impacting our brains but also our wallets by leading to increases in the cost of computer components. For some, AI might even be forcing them to pay more for gas at the pump, and a lawsuit filed in Sacramento, California, is aiming to do something about it.

Some gas station operators based in California are being sued by a group of drivers claiming these companies run  "an illegal algorithmic price-fixing scheme orchestrated by the algorithmic pricing company Kalibrate and some of the state's largest fuel retailers." The case was proposed as a class action lawsuit in the Sacramento federal court, and the plaintiffs claim that the gas stations violate a California antitrust law known as the Cartwright Act. They also state that the alleged price hikes violate Assembly Bill 325.

According to the lawsuit, the gas stations are allegedly using AI-based tools from Kalibrate to "coordinate high prices and wring more money from the pockets of consumers." According to Reuters, citing AAA, the current national average for gasoline is $3.93. In California, it's $5.58. Like finding a sign that a gas pump has a card skimmer, higher gas prices can often feel like robbery, and the use of AI to potentially inflate prices likely exacerbates matters.

The lawsuit casts a wide net on gas stations, with companies like 7-Eleven, Albertsons, Walmart, Marathon, Circle K, and BP all being defendants in the suit. In total, over 1,700 gas stations in California are part of the complaint. According to the filing, gas can cost up to $7 for some Californians, as the state pays some of the highest prices in the country. Plaintiffs argue that gas prices rise as much as 30 cents in areas where Kalibrate's AI tools are used.

In California, the Cartwright Act is a means to prohibit anti-competitive acts, and it's generally invoked by consumers accusing companies of price-fixing or restraining trade — companies can also employ it if they feel competitors have an unfair advantage. Additionally, Assembly Bill 325 makes it "unlawful for a person to 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." Essentially, the plaintiffs must prove Kalibrate's AI tools violated these laws.

According to Kalibrate's website, the company utilizes data, analytics, and software, including "industry-leading AI solutions," to help a variety of companies, including names like Aldi, The Home Depot, and Give Guys Burgers and Fries. As the suit notes, each additional penny on gas prices can cost drivers in California $134 million per year, it may be yet another sign of artificial intelligence causing the collapse of everything.