EU Antitrust Chief Considers Tougher Line on Automated Pricing Given Collusion Risk
March 16 2017 - 6:46AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS--The European Union's antitrust agency is scrutinizing
whether algorithms make it easier for companies to collude over
prices online and is considering stricter fines for cartels using
those tools, the bloc's competition chief said Thursday.
At issue are programs companies use that continuously crawl the
internet to check prices in online shops. That software allows the
firms to monitor or adjust prices automatically, thereby
potentially helping cartels operate more effectively.
"We need to keep an eye out for cartels that use software to
work more effectively," EU antitrust chief Margrethe Vestager said
in a speech at an event hosted by the Germany's Federal cartel
office. "If those tools allow companies to enforce their cartels
more strictly, we may need to reflect that in the fines that we
impose."
In a joint report last year, the German and French competition
authorities raised the issue of tacit or explicit collusion through
transparency of online prices.
Ms. Vestager noted that the practice of using automated price
systems was common: around two-thirds of retailers who track
rival's prices use automated systems, some of which also use the
software to automatically adjust prices.
She referred to one example where two different companies sold
posters of music artists like Justin Bieber and agreed not to
undercut each other's prices on Amazon.com Inc. (AMZN) by using
pricing algorithms to ensure their prices were matched.
Still, she said, not all automated pricing systems are
necessarily suspicious, such as algorithms to find the lowest
prices, like air fares.
Antitrust authorities in the U.S. and Britain have already
investigated some automated pricing cases, such as the posters
case. The EU, meanwhile, is looking at whether software has limited
the ability of retailers to set their own prices for consumer
electronics, in a recently announced e-commerce case, she said.
The EU watchdog said that while the previous antitrust cases
dealt primarily with agreements put in place by people and
implemented by computers, she said there was capacity for illegal
collusion agreements to be struck directly between different
companies' software.
"We need to make it very clear that companies can't escape
responsibility for collusion by hiding behind a computer program,"
she said, adding that companies should build pricing algorithms in
a way that doesn't allow them to collude with others.
-Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
March 16, 2017 06:31 ET (10:31 GMT)
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