A newly filed federal lawsuit alleges that artificial intelligence software gave gas station operators in California the ability to illegally work together to push fuel prices higher, all without ever sitting down in the same room.
The proposed class action, filed Monday, names major fuel retailers including Marathon, Circle K, BP, Speedway, EG America, Walmart, and Albertsons as defendants. Together, those companies operate more than 1,700 gas stations throughout California, according to the lawsuit. The case centers on a fuel-pricing platform called Kalibrate, which the plaintiffs describe as the “central nervous system for a conspiracy to extinguish retail price competition among gas stations.”
According to the lawsuit, Kalibrate does more than just track competitor prices — it actively steers gas station operators away from lowering their prices, warning that cutting below competitors would set off a “downward spiral.” The lawsuit states that Kalibrate “promises that if gas stations surrender their pricing decisions and competitively sensitive cost and volume data to Kalibrate Fuel Pricing, the software will enable them to avoid competing with other area stations and to charge higher prices to consumers.”
The filing also highlights a specific feature described as a “restoration” tool, which allegedly helps nearly all stations in a given area raise their prices at the same time and by significant amounts. Research cited in the lawsuit found that algorithmic fuel-pricing software led to average price increases of roughly 6 cents per gallon, with increases reaching as high as 30 cents per gallon in markets where the technology is widely used.
“Because of the volume of fuel sold across California, a single cent increase at the pump will drain a whopping $134 million from California drivers’ wallets every year across the state,” the lawsuit states.
The lawsuit draws a sharp contrast between old-fashioned price-fixing schemes and today’s AI-driven version. Rather than competitors making backroom deals, the alleged coordination now happens through software. “As technology has advanced, so too have the mechanisms available to competitors to fix prices without the cigars, the smoke, or even the room,” the lawsuit reads.
California drivers already face some of the steepest fuel costs in the country, and prices have climbed further since the beginning of the Iran war.
This case fits into a broader legal pattern in which software platforms are being accused of inflating the cost of living for millions of Americans. Similar lawsuits include the Department of Justice’s case against RealPage, which allegedly helped landlords coordinate rent increases, and the DOJ’s action against Agri Stats, accused of enabling the meatpacking industry to raise grocery prices. The DOJ has reached settlements in both of those cases within the past year, though several state attorneys general continue to pursue their own legal actions against RealPage and property management firms.
The legal groundwork for this week’s California filing was partly laid last year, when Democratic California Gov. Gavin Newsom signed legislation clarifying that the state’s antitrust laws apply to pricing algorithms.
Kalibrate, which is headquartered in Manchester, England, and operates across more than 70 countries, did not respond to a request for comment. None of the named gas station defendants immediately responded to requests for comment either.
The lawsuit seeks to represent California drivers who purchased fuel at stations using Kalibrate’s software at any point since June 2022.
