A new federal class action alleges that Kalibrate, an AI-based fuel pricing software, has enabled gas station operators across California to secretly coordinate prices, resulting in elevated fuel costs for consumers. The lawsuit targets major chains including Marathon and Circle K, accusing them of violating state antitrust laws by using technology to suppress price competition.
The complaint describes Kalibrate as a sophisticated system that acts as the "central nervous system" for this alleged conspiracy, guiding stations to maintain high prices. The software reportedly discourages users from undercutting competitors, warning that lowering prices could spark a “downward spiral” of cuts across the area. Instead, it facilitates synchronized price hikes through features like a "restoration" tool that prompts stations in the same region to raise prices simultaneously and sharply.
California already faces some of the nation’s highest gas prices, which have surged globally amid ongoing geopolitical tensions. This lawsuit adds to a growing wave of legal challenges focused on algorithm-driven pricing tools, accusing them of inflating costs for consumers. Earlier suits have targeted software firms allegedly involved in rent and grocery price inflation, some of which have been settled by the Department of Justice.
The state has recently updated its antitrust framework to address these emerging technologies. Last year, California’s governor signed legislation clarifying that antitrust laws do apply to pricing algorithms, setting the legal groundwork for this suit.
Kalibrate, headquartered in Manchester, England, operates in over 70 countries but has not issued a public response to the allegations. The lawsuit emphasizes how AI replaces traditional collusion methods, describing the process as computerized price-fixing rather than secret human agreements.
This development spotlights concerns over algorithmic pricing in essential markets, where software can make illicit coordination less visible and more automatic, ultimately burdening consumers with higher expenses.