| |OCTOBER 202119online content and pricing is customized to suit user preference.Constant tracking of user behavior onlineaccurately and processing the data by engaging AI powered bots andintelligent algorithms, search engines, e-Commerce and marketplace organisations makes this kind of highly personalized user experience possible. Using big data analytics, organizations are able to profile individual users precisely and deliver a customised content including products, services as well as dynamic pricing.It's true that big data analytics has benefited immensely certain fieldssuch asmedical research, access to quality health care, improved treatments and other facilities. When it comes to commercial purpose, big data gives an edge to some organisations in the digital space to target millions of people with customized advertisements, dynamic pricing for products and services giving them undue advantage over their brick and mortar rivals.Algorithmic Collusion & Pricing BotsTraditionally, competition law regimes viewedany form of cartel, collusion of organisations to fix prices, agreement not to compete against one another, exclusive agreements, territorial restrictionsor any such monopolistic practices, as anti-competitive, and penalized, such organizations for engaging in such practices. However if this kind of collusion happens not between humans but between AI powered algorithms, which decide pricing without human intervention,which are programed to avoid competition or price war automatically, will it be treated as anti-competitive by antitrust authorities?Algorithms can be programed to track the behavior of numerous rivals and anticipate and react to competitive threats, avoid price war and tacitly collude. Potentially, these autonomous pricing algorithms may without human intervention, and without explicit human command, independently discover that to make the highest possible profit, there should be no price war. The algorithms may learn to tacitly collude even if they have not been specifically instructed to do so and even if they do not communicate with one another.With no express illegal agreement, no anti-competitive agreement, no explicit cartel or price fixing, and no human interference, it may be difficult to prosecute and fix liability in such cases.Antitrust Enforcement ChallengesAt present, while explicit collusionsisillegal, tacit collusion falls outside the purview of competition law. EU and other major competition law regulations do not cover this kind of tacit collusion. This could potentially create an enforcement gap.Algorithm driven marketplace, search engine are exempt from many legal and regulatory compliance requirements. Therefore,antitrust regulators are faced with the following challenge in fixing responsibility and taking enforcement actions- · Is this even a competition law problem?· How to ensure fair competition in a digital market where there is tacit collusion of algorithms? · If the bots and algorithms decide pricing and constantly change it depending on user profile, is competitive pricing an illusion? · Can antitrust liability be established when business decisions are made by machines rather than by human beings?Similar to "lifting corporate veil", the antitrust regulators should be able to bring the programmer(s)who designed such algorithms to support tacit collusion or the organisations that use that algorithms and make them accountable for distortion of competition. FAIR AND EFFECTIVE COMPETITION IN TURN WILL PROMOTE ECONOMIC GROWTH AND DEVELOPMENT, GREATER INNOVATION, OPERATIONAL EFFICIENCY, BETTER QUALITY OF PRODUCTS AND SERVICES AT LOWER PRICES AND OVERALL CONSUMER WELFAREVijayalakshmi Natarajan
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