ABA Antitrust Spring Meeting.

In one of the sessions, the issue of pricing determined or set by algorithms was discussed.

Here are his thoughts 👇🏻

“The discussion was interesting and challenging, as this topic generates more questions than answers. It is a fact that many industries are setting their prices or conditioning the supply of their goods and services on the basis of algorithms or other AI mechanisms. The question that arises is when these behaviors are to be considered as transgressing the line of legality and become collusive behaviors. There is no unequivocal answer and, as always, the facts will be critical. Thus, with respect to a particular case, one should ask: is the information collected by the algorithm historical or not; is it public information or confidential information of competitors; what use or treatment did the algorithm give to that information; was it substantial information that altered the behavior of the players in the market; what efficiencies were produced; was the algorithm acting neutrally or was some additional coordination required; did two or more competitors use the same pricing algorithm; were they aware of it?

At the end of the day, unless effective coordination is involved, either directly between competitors or indirectly through communications with the algorithm provider, it seems unlikely that a case of this nature could be considered a per se violation of free competition or a “hard core cartel”. Rather, it is conduct that must be analyzed under the rules of reason. The sharing of aggregated, non-public, “averaged” information can produce efficiencies in many industries, and the use of algorithms can be very useful in that regard.

Litigation affecting RealPage in the U.S. today. can shed light on these very fundamental issues”.