California · Circle · Iran · Fortune Technology
Gas station owners have detected a apply case for AI, suit confirms: colluding to address prices
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AI-powered software has allowed gas station operators across California to illegally collude and drive up prices at the pump, according to a federal lawsuit.
Key facts
- According to the lawsuit, research into algorithmic fuel-pricing software found average price increases of about 6 cents per gallon, rising to as much as 30 cents per gallon in markets where many
- 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
- The defendants in the lawsuit, which also include BP, Speedway, EG America, Walmart and Albertsons, collectively operate more than 1,700 gas stations in California, according to the lawsuit
- Kalibrate is headquartered in Manchester, England, and operates in more than 70 countries
Summary
The proposed class action lawsuit, filed Monday, accuses gas station giants including Marathon and Circle K of violating California’s antitrust law through Kalibrate, a fuel-pricing software system used across the world. According to the lawsuit, Kalibrate helps “coordinate high prices” and even discourages its users from pricing their gas lower than competitors, saying that doing so would trigger a “downward spiral.” “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 lawsuit said. Californians already pay some of the highest gas prices in the nation, and prices have surged across the globe since the start of the Iran war.