Retailers – can you be liable for cartel behaviour for using pricing software and algorithms? | JDSupra
A key issue regulators are grappling with is what antitrust liability can attach to retailers who use price matching software or other algorithms to match competitors’ online prices?
In a speech made on 16 March 2017, the EU’s Commissioner for Competition, Margrethe Vestager, confronted the growing issue of the use of price matching software (PMS) and algorithms. The Commissioner singled out automated systems that monitor and even adjust prices automatically across the internet as a main area of concern for the Commission.
The EU Commission recently conducted an inquiry into e-commerce called the “Digital Single Market Initiative” in which it identified this trend. The inquiry found that two thirds of retailers now track their competitors’ prices using automated systems. The central concern is that the transparency of prices online is actually making it easier for companies to monitor prices and collude, with the aide of automated software. In addition there is a further enforcement problem.
EU competition law can be used to discipline such behaviour if there is some form of agreement or collusion between two or more competitors to fix or align their respective prices on the market. That is clearly cartel behaviour. However, possible scenarios suggest themselves where companies make use of PMS to match or align their prices with competitors without any form of contact with each other, let alone any evidence of collusion between two parties.
Under EU antitrust laws, regulators can only act if there is some evidence of an agreement between the parties or some form of collusion. If the use of PMS is truly unilateral and the company is not in a dominant position, are the authorities therefore powerless to act?
This issue has come up in two recent cases. We previously commented on the UK’s enforcement action against online poster retailers for price fixing over online marketplaces in this post: http://eu-competitionlaw.com/cma-continues-crackdown-against-price-fixing-online/
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