Algorithmic Tacit Collusion

Tacit collusion is a well-studied phenomenon accepted in competition law as an anomaly that only occurs under specific conditions. However, with the rise of artificial intelligence, it is more likely that pricing algorithms could develop the ability to collude in more instances and without human interference. While neither tacit collusion nor its algorithmically induced version constitutes a concerted practice, algorithmic tacit collusion is sufficiently different from a technical, economic, and policy perspective to warrant alternative legal treatment. Algorithmically induced tacit collusion in fact resembles a cartel in its effects and should, in principle, also be treated as such. In his comprehensive study, Adrian Doerr develops a new approach within the existing regulatory framework to keep algorithmic tacit collusion in check.