---
title: "Lawsuit Says Gas Chains Used Pricing Software to Inflate California Fuel Prices"
description: "A new class-action lawsuit accuses more than a dozen major gas chains of using a shared algorithmic pricing service to keep California fuel prices artificially high — an early test of a state law, effective this year, that targets pricing algorithms. The companies have not responded to the allegations, which remain unproven."
category: "Los Angeles"
category_url: https://herald.la/category/los-angeles
author: "Camila Reyes"
published: 2026-07-02T08:30:03.000Z
updated: 2026-07-02T08:30:03.000Z
canonical: https://herald.la/article/lawsuit-says-gas-chains-used-pricing-software-to-inflate-california-fuel-prices
tags: ["gas prices", "algorithmic pricing", "antitrust", "California", "cost of living"]
---
# Lawsuit Says Gas Chains Used Pricing Software to Inflate California Fuel Prices

A new class-action lawsuit accuses more than a dozen major gas chains of using a shared algorithmic pricing service to keep California fuel prices artificially high — an early test of a state law, effective this year, that targets pricing algorithms. The companies have not responded to the allegations, which remain unproven.

For all the reasons California drivers pay some of the nation's highest gas prices, a new lawsuit points to an unexpected one: software. Three California residents have sued a pricing-software company and more than a dozen large gas chains, alleging they used a shared algorithm to blunt competition and keep prices up.

## The allegation

The class action, filed in late June in federal court for the Eastern District of California, names Kalibrate — the pricing service run by Knowledge Support Systems — along with chains including 7-Eleven, Circle K, Marathon, BP, Speedway, EG America, Walmart and Albertsons, [the Associated Press reported](https://www.10news.com/news/ai-is-helping-gas-stations-collude-to-raise-california-fuel-prices-lawsuit-says). The complaint calls the software the "central nervous system for a conspiracy to extinguish retail price competition among gas stations."

According to the suit, Kalibrate pulls in nonpublic cost and volume data from thousands of sources and feeds each subscribing station pricing recommendations — a setup the plaintiffs say discourages stations from undercutting one another, softening the price wars that would otherwise push prices down, [as Popular Information described](https://popular.info/p/gas-stations-are-using-ai-to-inflate). The plaintiffs estimate the effect at roughly 6 cents a gallon on average, and up to about 30 cents in places; with Californians burning some 13.4 billion gallons a year, they argue even a single cent adds up to about $134 million annually.

These are allegations, not findings. The defendants had not responded publicly, and proving the case will require showing the companies did more than independently choose to buy the same software.

## Why it's a test case

The suit leans on a change to California's antitrust law — Assembly Bill 325 — that took effect January 1, 2026, and makes it unlawful to "use or distribute a common pricing algorithm" as part of a conspiracy to restrain trade, [the law firm ArentFox Schiff noted](https://www.afslaw.com/perspectives/alerts/californias-new-algorithmic-pricing-law-focus-gas-station-antitrust-lawsuit) in an analysis. The measure updated the state's century-old Cartwright Act — which allows triple damages — for an era in which competitors can align prices through software rather than a smoke-filled room, and it eased the bar plaintiffs must clear to get such a case past an early dismissal.

## The stakes for drivers

Algorithmic pricing has drawn scrutiny well beyond gas pumps — from rental housing to hotels — as regulators ask whether software that digests rivals' data can produce the same result as old-fashioned collusion. For Angelenos, the question is concrete: whether some part of California's stubbornly high pump price reflects the market, the state's fuel rules and supply constraints — or, as this suit alleges, a thumb on the scale. That is now for the courts to sort out.

## Sources

- [AI is helping gas stations collude to raise California fuel prices, lawsuit says](https://www.10news.com/news/ai-is-helping-gas-stations-collude-to-raise-california-fuel-prices-lawsuit-says)
- [Gas stations are using AI to inflate prices, new lawsuit alleges](https://popular.info/p/gas-stations-are-using-ai-to-inflate)
- [California's new algorithmic pricing law is the focus of a gas-station antitrust lawsuit](https://www.afslaw.com/perspectives/alerts/californias-new-algorithmic-pricing-law-focus-gas-station-antitrust-lawsuit)