The claim alleges that one of Kalibrate’s “restoration” tools, when used, effectively lets “nearly all gas stations in an area raise their prices contemporaneously and by a large amount.”
A recently-filed federal lawsuit accuses some of California’s largest gas station operators of using artificial technology as part of a conspiracy to increase prices at the pump.
According to The Associated Press, the proposed class-action lawsuit accuses the defendants—including Marathon and Circle K—of violating antitrust rules through their collective use of Kalibrate, a pricing software system that is used in countries around the world.
The lawsuit describes Kalibrate as the “central nervous system for a conspiracy to extinguish retail price competition among gas stations.” Kalibrate, attorneys say, helps “coordinate high prices” and, at times, goes so far as to discourage clients from offering competitive fuel rates, claiming that decreases would trigger a “downward spiral” across the market.
“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 alleges.
The Associated Press notes that Kalibrate is headquartered in the United Kingdom; the company has yet to respond to media requests for comment.
The lawsuit uses descriptive language to detail the alleged conspiracy. Attorneys say that Kalibrate operates in the same manner as a “cartel.” But instead of abetting collusion “over cigars in a smoky back room,” everything is done through artificial technology.
“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 says.
The claim alleges that one of Kalibrate’s “restoration” tools, when used, effectively lets “nearly all gas stations in an area raise their prices contemporaneously and by a large amount.” Research into similar algorithmic pricing strategies has found that this type of software raises the price of gas, on average, by about 6 cents per gallon; in locations where Kalibrate is common, these rise to more than 30 cents per gallon.
“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 says.
The defendants in the lawsuit include Marathon, Circle K, BP, Speedway, EG America, Walmart, and Albertsons, which collectively operate more than 1,700 gas stations across California.
The Los Angeles Times indicates that the Kalibrate claim is part of a broader trend against the use of algorithmic price-setting software. In 2024, the U.S. Department of Justice filed a lawsuit against RealPage, a Texas-based company that allegedly consolidated landlord data to help raise rents throughout entire geographical markets. In one instance, a landlord told RealPage that they managed to raise rents within a single week of using the company’s software. Within a year, their average rents had increased by more than 25%. RealPage ultimately settled the lawsuit, agreeing to stop certain practices, including the collection and analysis of landlords’ competitive rental metrics.
Speaking to the Times, UC Berkeley Center for Consumer Law & Economic Justice Professor Ted Mermin said that these kinds of practices are having an obvious impact on consumers’ spending power.
“People can’t afford to make ends meet,” he told the Los Angeles Times. “Why is that? A lot of that has to do with there is no competition. And people know that.”
Sources
AI is helping gas stations collude to raise California fuel prices, lawsuit says
Gas giants use AI to raise prices, lawsuit says, another algorithmic hit to the cost of living
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