Pricing algorithms can be deployed as a tool to facilitate collusion and therefore cause consumer harm. Where this happens, the conduct may not necessarily involve a “contract,” “arrangement” or “understanding” which had to be proven to establish an infringement of the former section 45 of the Australian Competition and Consumer Act 2010 (Cth). In November 2017, the CCA was amended to prohibit concerted practices that have the purpose or effect of substantially lessening competition. However, Australian competition law lacks a definition of the term “concerted practices.” The judicial interpretation of that term will be decisive for the scope of the prohibition and the types of algorithmic collusion it may capture. This paper briefly analyses the extent to which the new prohibition of concerted practices may capture algorithmic collusion.

By Baskaran Balasingham1

 

I. INTRODUCTION

Pricing algorithms are often used by online retailers and e-commerce platforms. The data-driven innovations including price monitoring and efficient price discrimination that stem from pricing algorithms can enhance consumer welfare. On the other hand, pricing algorithms can be deployed as a means to facilitate collusion and can therefore cause consumer harm. Until not long ago it was cumbersome enough for the Australian Competition and Consumer Commission (“ACCC”) to establish an anticompetitive agreement when it was solely about conduct of human beings. How much more

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