About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

17 Nw. J. Tech. & Intell. Prop. 217 (2019-2020)
Sustainable and Unchallenged Algorithmic Tacit Collusion

handle is hein.journals/nwteintp17 and id is 218 raw text is: Copyright 2020 by Ariel Ezrachi & Maurice E. Stucke Volume 17, Number 2 (2020) Northwestern Journal of Technology and Intellectual Property SUSTAINABLE AND UNCHALLENGED ALGORITHMIC TACIT COLLUSION Ariel Ezrachi* & Maurice E. Stucke** ABSTRACT-Algorithmic collusion has the potential to transform future markets, leading to higher prices and consumer harm. And yet, algorithmic collusion may remain undetected and unchallenged, in particular, when it is used to facilitate conscious parallelism. The risks posed by such undetected collusion have been debated within antitrust circles in Europe, the US, and beyond. Some economists, however, downplay algorithmic tacit collusion as unlikely, if not impossible. Keep calm and carry on, they argue, as future prices will remain competitive. This paper explores the rise of algorithmic tacit collusion and responds to those who downplay it, by pointing to new emerging evidence and the gap between law and this particular economic theory. We explain why algorithmic tacit collusion is not only possible but warrants the increasing concerns of many enforcers. Keywords: Competition law, Antitrust, Algorithms, Algorithmic Tacit Collusion, Hub and Spoke JEL Classification: D43, D50, D81, K21, L1, L13, L16, 030 INTRODUCTION ................................................ ......218 I. ALGORITHMIC TACIT COLLUSION - THE BASE CONDITIONS ........ .........224 II. THE (IN)STABILITY OF TACIT COLLUSION ABSENT COMMUNICATION ...................230 III. THE (IM)PLAUSIBILITY OF ALGORITHMIC TACIT COLLUSION .... ...............241 A. Simple Algorithms. ............................ .................... 242 B. Artificial Intelligence ........................................... 250 IV. RECOMMENDATIONS ........................................ ......255 CONCLUSION ................................................................259 Slaughter and May Professor of Competition Law, The University of Oxford. Director, Oxford University Centre for Competition Law and Policy. * Douglas A. Blaze Distinguished Professor of Law, University of Tennessee College of Law. We are grateful for comments received from participants in the 2017 Organization for Economic Co- operation and Development [OECD] roundtable on Algorithms and Collusion and the 2018 Max Planck Round Table Discussion on Tacit Collusion 217

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most