Brattle Principal Rosa Abrantes-Metz and Senior Consultant Albert Metz have coauthored a Competition Policy International (CPI) Antitrust Chronicle article that explores whether pricing algorithms invite price coordination and possible collusion among industry competitors. In the article, “Pricing Algorithms and Collusion: Is There Clarity on What Corporations May be on the Hook For?” the authors express the importance of defining what collusion looks like in the market before competition authorities take action.
Significant attention has been placed on whether pricing algorithms facilitate collusion and whether this should be the central focus of competition authorities. Opinions range from, “making all tacit collusion illegal since pricing algorithms facilitate collusion,” to, “there is nothing new here, nor anything that needs to be addressed.” The authors’ view is that a necessary, but currently missing, first step is to clearly define what collusion or actual coordination looks like in the context of pricing algorithms. What is a “collusive algorithm?” Would we know one if we saw it? Only with a working definition can we really begin a discussion of what, if anything, needs to be updated or addressed in the various legal frameworks, and only then can policymakers provide corporations with any sort of guidance for the development, implementation, and monitoring of non-collusive pricing algorithms.
The full article, “Pricing Algorithms and Collusion: Is There Clarity on What Corporations May Be on the Hook For?” is available below.