Retailers should be responsible for algorithms leading to pricing collusion, Portuguese regulator says

26 February 2020 00:00

Online retailers using pricing algorithms that lead to pricing collusion, whether directly or indirectly, should be held responsible for any anticompetitive misconduct arising from that, the head of Portugal's competition authority has said.

Pricing algorithms allow companies to set prices automatically by tracking and matching competitors’ prices.

As the keynote speaker of an event in Paris this February, Margarida Matos Rosa said that even though competition enforcers still need to "understand the full impact of learning algorithms and of algorithms developers, we fear [involuntary] collusion."

The use of algorithms is widespread among online retailers, with about 65 to 70 percent already using the technology, she said.

The comments echo views expressed by French and German competition authorities in a joint paper on algorithms published last November. The paper said that collusion caused by algorithms can be addressed under EU competition law.

At the time, French competition head Isabelle de Silva said that digital platforms such as Amazon and Google — and others such as Netflix and Spotify that built their business models using algorithms — should be held accountable for algorithm-based antitrust infringements.

Last July, the Portuguese competition watchdog published a similar paper on the use of algorithms. The report warned companies about the use of algorithms, which may lead to price collusion or weaken competition.

At the event in Paris today, Rosa also pointed out that "access to data is a key issue to restore consumers' trust and confidence."

As competition reports pushing for measures to regulate digital platforms are piling up, Rosa said that they all agree that there's a “need for speedier competition enforcement to ensure data access and interoperability.”

Rosa, who oversees the coordination work between the Organisation for Economic Cooperation and Development and the International Competition Network, is an elected member of the ICN Steering Group for the 2019-2021 mandate.

Last week, the European Commission published proposals to regulate the digital economy, including a new data strategy and white paper on AI.

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