A federal class-action lawsuit filed Monday in Sacramento accuses some of the biggest names in fuel retail — BP, Marathon, 7-Eleven, Walmart, Albertsons, and Circle K — of using an AI pricing tool to illegally coordinate gas prices across California. The software, called Kalibrate Fuel Pricing, allegedly ingests real-time competitor data and recommends prices designed to suppress competition, not encourage it.

The numbers are grim. According to the complaint (Reuters), prices rose as much as 30 cents per gallon in areas where the tool was widely adopted — and every single penny of that increase costs California drivers an extra 34 million per year. With 1,732 stations named in the suit (Forbes), the scale is staggering.

This is the first major test of Assembly Bill 325, California's landmark law — effective January 1, 2026 — that explicitly bans algorithmic price-fixing. The complaint doesn't mince words: it calls Kalibrate an 'AI-powered trust' that ensured 'no matter where a driver turns, the price for gasoline is artificially high.' A 'restoration' feature in the tool even allowed stations to simultaneously push through large price hikes, the lawsuit alleges (The Guardian).

For years, the AI industry has pitched itself as a force for efficiency and optimization. This lawsuit paints a different picture: an algorithm that optimized extraction from everyday people at the pump. If the plaintiffs win, the case could reshape how algorithmic pricing tools are regulated across every industry — from groceries to rent. The AI didn't just watch the market. It rigged it.