A federal class action filed in Sacramento is testing whether the age-old crime of price-fixing can be committed not in a smoke-filled room, but by an algorithm quietly reading a rival's pump prices. Three California residents allege that the corporate owners of more than 1,700 gas stations across the state — including Marathon Petroleum, 7-Eleven, Walmart, and Circle K — used an AI-powered pricing platform called Kalibrate to abandon competition and squeeze drivers at the pump.
The suit, brought June 22, 2026, in the U.S. District Court for the Eastern District of California against Knowledge Support Systems (doing business as Kalibrate) and 14 of the largest fuel retailers operating in the state, is among the first major tests of a rewritten California antitrust law aimed squarely at shared pricing software. It frames Kalibrate as the engine of "a conspiracy to extinguish retail price competition."
What the Complaint Alleges
Gasoline retailing has traditionally been a brutally competitive business, with operators, as the complaint puts it, "aggressively undercutting one another's retail prices" to lure drivers to their pumps. The lawsuit alleges Kalibrate persuaded station owners to surrender that instinct — and their confidential cost and volume data — to software that connects directly to station signs and pumps.
According to the complaint, Kalibrate "relies on the data of competing gas stations to coordinate high prices and wring more money from the pockets of consumers throughout the state." Stations using the software, plaintiffs say, charge between 6 cents and 30 cents more per gallon. The scale is enormous: the filing notes that "a single cent increase at the pump will drain a whopping $134 million from California drivers' wallets every year across the state."
The plaintiffs quote heavily from Kalibrate's own interface and marketing. They highlight a feature that lets stations coordinate what the software calls a "restoration" — described in the complaint as "a phenomenon where nearly all gas stations in an area raise their prices contemporaneously and by a large amount." Kalibrate's marketing, the suit says, warns operators that when oil prices fall "it's critical to avoid a race to the bottom," and cautions that cutting prices could trigger "a downward spiral" with "negative implications for everyone operating in that market." The company allegedly promises customers "complete visibility on your competitors," and in one case touts helping a station lift weekly profit by $587 even as its sales volume fell 2.2 percent.
Kalibrate's reach extends well beyond California. The company claims to set fuel prices for "8 of the top 10 fuel retailers in the USA" and for 14 of the top 20 convenience store chains.
The New Law at the Heart of the Case
The case rests on Assembly Bill 325, an amendment to California's Cartwright Act that Governor Gavin Newsom signed on October 6, 2025, and that took effect January 1, 2026. The law makes it "unlawful for a person to use or distribute a common pricing algorithm as part of a contract, combination in the form of a trust, or conspiracy to restrain trade." It defines a "common pricing algorithm" broadly as any technology "used by two or more persons, that uses competitor data to recommend, align, stabilize, set, or otherwise influence a price or commercial term."
That definition maps closely onto the plaintiffs' description of the software. "Kalibrate Fuel Pricing is software used by two or more persons that uses competitor data to recommend, align, stabilize, set, and influence gasoline prices," the complaint alleges. The plaintiffs argue AB 325 "was enacted to make clear that companies cannot evade liability for fixing prices by delegating their illegal trusts to an algorithm."
Crucially, AB 325 also lowered the bar for such suits to survive. A complaint now clears dismissal if it alleges facts making a conspiracy merely plausible; plaintiffs no longer must plead facts that "tend to exclude the possibility of independent action." The amendments also raised maximum corporate criminal fines to $6 million from $1 million and authorized civil penalties of up to $1 million per violation. Notably, single-firm algorithms using only a business's own data fall outside the law.
Why It Matters
The gas suit lands inside a fast-widening front in antitrust law: whether feeding a common algorithm competitors' data amounts to the "agreement" that price-fixing law has always required. The template is RealPage, the rent-pricing software the Justice Department sued in 2024 for letting landlords collude on rents — conduct the White House Council of Economic Advisers estimated cost renters $3.8 billion in 2023 alone.
But RealPage also illustrates the uncertainty. In November 2025 the Trump DOJ settled with RealPage without any admission of liability, extracting reforms — barring the use of rivals' nonpublic forward-looking data and making its price "Governor" symmetrical — but explicitly not treating algorithmic pricing as inherently illegal. Ten states are pressing on regardless.
California's answer is to legislate around the ambiguity. By defining the offending conduct at the level of the software itself and easing the pleading standard, AB 325 shifts the fight from whether an agreement existed to whether the tool qualifies. If the Kalibrate plaintiffs prevail, it would signal that vendors and users of shared pricing engines — in fuel, housing, hotels, and beyond — face real exposure under state law even where federal enforcers have pulled back.
What to Watch
The first hurdle is a motion to dismiss, the earliest real test of whether AB 325's relaxed pleading standard does what its authors intended. Watch, too, whether Kalibrate and the retailers argue the software merely offers unilateral recommendations from public signage — the "independent action" defense the amendment was written to blunt. A ruling either way will ripple across the growing docket of algorithmic-pricing litigation, and may draw other state attorneys general, emboldened by their continued pursuit of RealPage, into the fuel market. For California's 27 million licensed drivers, the stakes are measured a cent at a time — and, by the plaintiffs' own math, in hundreds of millions of dollars a year.
"Kalibrate relies on the data of competing gas stations to coordinate high prices and wring more money from the pockets of consumers throughout the state."— Class action complaint, U.S. District Court, E.D. California