EU: Regulator may create algorithms to find anticompetitive pricing

To find companies that may be using software to fix prices, EU regulators may create their own algorithms. European Competition Commissioner Margrethe Vestager said that it’s now easy for price collusion to occur, Reuters reported.

“It is a hypothesis that not all algorithms will have been to law school,” Vestager said at an event on Friday, May 4. “So, maybe there is a few out there who may get the idea that they should collude with another algorithm who haven’t been to law school either. So, of course, we would like to have our own algorithms to be out there, looking into the market, figuring out if there has been collusion taking place.”

Through an inquiry in 2017, the European Commission discovered that two-third of retailers use software tools to monitor prices from their competitors. And, while it’s not entirely clear if those that make and use the algorithms can be responsible for collusion, Vestager has reportedly commissioned a study on the matter.

The news comes as the European Commission is also currently creating new regulations for eCommerce, app stores and search engines. The idea behind the new rules is to get the companies to be more transparent about how they rank and list results and why some services get delisted and others don’t.

The proposal would mandate tech firms to disclose how they determine rankings and how algorithms are deployed, described generally (the algorithms themselves will not be explicitly disclosed). Any changes in terms and conditions must be announced 15 days prior to implementation, and smaller firms must be given “individualized” descriptions of reasons for suspension or delisting.

The proposal is set to be published next month and then must be approved by the European Parliament and by national governments, said Reuters. As has been noted, tech companies have become more highly regulated in Europe, as regulators focus on user data, tax payments and other business processes.

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