Algorithmic Price Fixing: A Comparative Study on US, EU ‎and Iranian Competition Law

Document Type : Research Paper

Author

Department of International Trade Law & Intellectual Property and Cyberspace Law Department, ‎Faculty of Law, Shahid Beheshti University, Tehran, Iran

Abstract

Employing algorithms and AI in digital markets especially in pricing and collusion fields have raised big challenges for undertakings, competition authorities and scholars. Algorithms are sometimes applied as a messenger to form and monitor collusion, and sometimes they facilitate cartel as a hub among competitors. Algorithms in other situations cause parallel conducts, concerted practices and tacit collusion in pricing field and even super intelligent algorithms may collude with each other independently. Having clarified the role of algorithms in digital markets, this paper in a comparative study, is going to analyze EU and US law approaches about the role of such modern technologies in price fixing. The research shows that AI function has changed price fixing dramatically in such a way that in some situations, the competition law confronting such practices, cannot prohibit or approve the legality of pricing method conclusively, and there is a lot of disagreement among the jurists too. In our competition law, which generally suffers from statutory support and impressive precedent in solving the competitive problems of digital markets, the issue of algorithmic price fixing, especially in tacit collusion, confronts double complexities. The findings of current comparative study indicate that regardless of the necessity in revising the approaches regarding the competitive aspects of pricing in virtual markets, special attention to the role of new technologies such as algorithms and considering the legitimate rights of platforms and startups to monitor and adjust prices, in suspected cases of violations of competition law, we should take the criteria of consumer benefits influenced by the anticompetive algorithm conducts which finally result in high prices and eliminationg competitors. Meanwhile taking measures to ex-ante control of algorithms and reasonable extension of responsibility of employer- undertakings and developers have great significance.

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References

  1. English

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Comparative Law Review
Volume 14, Issue 1
Spring & Summer 2023
July 2023
Pages 269-290

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