Artificial Intelligence and Competition Law

Abstract

Firms use algorithms for important decisions in areas from pricing strategy to product design. Increased price transparency and availability of personal data, combined with ever more sophisticated machine learning algorithms, has turbocharged their use. Algorithms can be a procompetitive force, such as when used to undercut competitors or to improve recommendations. But algorithms can also distort competition, as when firms use them to collude or to exclude competitors. EU competition law, in particular its provisions on restrictive agreements and abuse of dominance (Articles 101–102 TFEU), prohibits such practices, but novel anticompetitive practices – when algorithms collude autonomously for example – may escape its grasp. This chapter assesses to what extent anticompetitive algorithmic practices are covered by EU competition law, examining horizontal agreements (collusion), vertical agreements (resale price maintenance), exclusionary conduct (ranking), and exploitative conduct (personalized pricing).