Artificially intelligent pricing raises competition red flags about colluding robots | afr.com

Artificial intelligence and algorithmic pricing have opened up new frontiers for price-fixing.

The use of artificial intelligence (AI) to determine your pricing is not novel; rather, it is now essential if you want to be, and remain, competitive.

But when will using algorithm-based software to make you highly competitive on price also lead you down the path of price-fixing?

You might relinquish pricing decisions to a machine, but can you relinquish your responsibility?

Following a human trait

If it weren’t illegal to price-fix humans would invariably make the profit-maximising decision to price-fix. What is to stop sophisticated machines from reaching this same conclusion?

Humans can clearly design pricing algorithms and rein in machine learning in order to minimise the risk of engaging in clearly understood forms of price-fixing.

Yet pricing algorithms can also be used to limit competition using more subtle means.

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Artificially intelligent pricing raises competition red flags about colluding robots | afr.com.