Michal S. Gal and Niva Elkin-Koren ‘Algorithmic Consumers’

This paper, published in the Harvard Journal of Law and Technology and available at https://jolt.law.harvard.edu/assets/articlePDFs/v30/30HarvJLTech309.pdf, focuses on the use of algorithms by consumers to orient and even take decisions regarding their purchases. The basic argument is that, with the Internet of Things, systems will move from merely making recommendations to making and executing decisions for the consumer by directly communicating with other systems through the internet. As rightly pointed out in the article, this is not unheard of: in some industries, such as stock trading, algorithms already automatically translate their results into buying decisions; there is even a washing machine that makes autonomous orders and payments (e.g., buying detergent) and updates the owner via a smartphone. The paper usefully contains a literature review on algorithmic competition (which, it must be said, is still rather limited). It also makes some valuable points, such as: algorithmic consumers may submit suppliers to increased competitive pressures and change the parameters of competition (since they will be able…