Artificial intelligence (AI) is making a lot of noise these days. This impacts not only our brains but also our wallets by leading to an increase in the cost of computer components. For some, AI could even force them to pay more for gas at the pump, and a lawsuit filed in Sacramento, California, aims to do something about that.
Some California-based gas station operators are being sued by a group of drivers, claiming the companies operate “an illegal algorithmic pricing scheme orchestrated by algorithmic pricing company Kalibrate and some of the state’s largest fuel retailers.” The case has been proposed as a class action in federal court in Sacramento, and the plaintiffs claim the gas stations are violating a California antitrust law known as the Cartwright Act. They also say the alleged price gouging violates Assembly Bill 325.
According to the lawsuit, gas stations would use Kalibrate’s AI-powered tools to “coordinate high prices and squeeze more money out of consumers’ pockets.” According to Reuters, citing AAA, the current national average for gasoline is $3.93. In California, it’s $5.58. Much like finding a sign that a gas pump is equipped with a card skimmer, higher gas prices can often feel like theft, and using AI to potentially inflate prices is likely making things worse.
Gas stations accused of inflating prices in California using AI
Konia4ka/Shutterstock
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, more than 1,700 gas stations in California are part of the complaint. According to the filing, gas can cost as much as $7 for some Californians because the state pays some of the highest prices in the country. The plaintiffs claim gas prices are increasing by as much as 30 cents in areas where Kalibrate’s AI tools are used.
In California, the Cartwright Act is a way to prohibit anticompetitive acts, and it is typically invoked by consumers accusing companies of price-fixing or restraining trade. Businesses can also use it if they believe their competitors have an unfair advantage. Additionally, Assembly Bill 325 prohibits “a person from using or distributing a common pricing algorithm as part of a contract, combination in the form of a trust, or conspiracy in restraint of trade.” Essentially, plaintiffs must prove that Kalibrate’s AI tools violated these laws.
According to Kalibrate’s website, the company uses data, analytics and software, including “cutting edge AI solutions”, to help a variety of businesses, including names like Aldi, The Home Depot and Give Guys Burgers and Fries. As the suit notes, every extra penny on gas prices can cost California drivers $134 million a year, which could be another sign of artificial intelligence causing everything to collapse.
