Ariel Ezrachi and Maurice E. Stucke ‘Sustainable and Unchallenged Algorithmic Tacit Collusion’ Oxford Legal Studies Research Paper No. 16/2019

This piece is similar to last week’s papers in that if focuses on the challenges posed by algorithmic tacit collusion, but arguably goes further. In previous work, the authors outlined four scenarios where algorithms may be used to facilitate collusion. There is a consensus that their first two scenarios – Messenger, where algorithms help humans collude; and Hub and Spoke, where a common intermediary provides the algorithm and the pricing decision mechanism that could facilitate collusion – pose competition issues that should be addressed under existing rules. Their third and fourth scenarios have proved more controversial. Under the third scenario, called Tacit Collusion on Steroids – The Predictable Agent, companies could unilaterally use algorithms with the intent to facilitate conscious parallelism (also known as tacit collusion). Under the fourth scenario, called Artificial Intelligence, God View, and the Digital Eye, algorithms may arrive at this anticompetitive outcome on their own. Tacit collusion is beyond the reach of the competition laws of…

German Monopolies Commission ‘Algorithms and Collusion’, Chapter I of the XXII. Biennial Report

The Monopolies Commission is a permanent, independent expert committee which advises the German government and legislature as regards competition policy-making, competition law and regulation. The chapter is already one year old, and can be accessed here. In data-intensive sectors such of the digital economy, pricing algorithms can facilitate collusion by automating collusive behaviour. For example, algorithms can stabilise collusion by allowing the collection of information on competitors’ prices and sanctioning deviations from collusive market outcomes more quickly. The use of pricing algorithms can also render explicit anticompetitive agreements or concerted practices dispensable. As a result, difficulties with determining whether a concerted practice is actually taking place will increase with the use of pricing algorithms. The Monopolies Commission considers that the use of pricing algorithms makes it necessary to strengthen market monitoring through sector inquiries. Since consumer associations are most likely to have indications of collusive overpricing, the Monopolies Commission recommends that consumer associations obtain the right to initiate competition sector…