California Drivers Sue Gas Chains Over AI Price Coordination

Major Gas Retailers Face Antitrust Claims

California drivers filed a federal class action lawsuit Monday against major gas station operators including BP, Circle K, Marathon, 7-Eleven, Walmart, and Albertsons, alleging the companies used artificial intelligence software to artificially inflate fuel prices across the state.

The complaint, filed in Sacramento federal court, accuses the defendants of violating California's Cartwright Act by deploying an AI-based pricing tool from a company called Kalibrate. According to the lawsuit, the software analyzes competitor pricing data to help stations coordinate higher prices rather than compete on cost.

The Guardian first reported details of the legal action, which represents drivers who purchased gasoline from more than 1,700 affected stations operated by the defendants in California.

Testing New State Price-Fixing Law

The lawsuit invokes Assembly Bill 325, California legislation that took effect January 1, 2026, specifically designed to address algorithmic price coordination. The new law targets scenarios where competing businesses use shared technology platforms to align pricing in ways that would constitute antitrust violations if done through direct human communication.

Drivers claim gas prices increased by as much as 30 cents per gallon in areas where high concentrations of stations use the Kalibrate system. The complaint notes that each penny of price increase costs California drivers an additional $134 million annually, contributing to pump prices that have reached $7 per gallon in some locations.

Why It Matters

This case represents one of the first major tests of legislation aimed at algorithmic collusion, a growing concern as AI pricing tools become standard across industries from hospitality to retail. If successful, the lawsuit could establish legal precedent for how antitrust law applies to AI-mediated coordination and potentially influence regulatory approaches in other states grappling with similar technology-enabled pricing practices.

California's Price Premium

California motorists already pay the nation's highest fuel costs, with regular gasoline averaging $5.58 per gallon compared to the national average of $3.93, according to AAA data. The lawsuit argues that algorithmic coordination has pushed prices to "astronomical" levels beyond what market conditions would otherwise support.

The complaint characterizes the arrangement as an "AI-powered trust" that eliminates meaningful price competition, forcing drivers to pay inflated costs regardless of which station they choose.

Kalibrate is named as a defendant alongside the gas station operators. None of the defendants immediately responded to requests for comment or declined to comment on the allegations. The lawsuit seeks unspecified damages on behalf of California drivers who overpaid for gasoline.

Details of the lawsuit were first reported by The Guardian.