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23 Bus. L. Int'l 5 (2022)
Algorithms: The Impact on Competition

handle is hein.journals/blawintnl23 and id is 11 raw text is: 5 Algorithms: The Impact on Competition Henri Piffaut* Introduction As information is digitised, algorithms become prevalent in many industries. They are used in numerous aspects of value creation: optimisation of processes, pricing, risk evaluation and for platforms in recommendations, ranking, moderation and so on. This article aims to address the impact on competition of some categories of algorithms. The algorithms reviewed include those that are most relevant for competitive interactions: those that gather information on market conditions (eg, monitoring or scraping algorithms), those that set a company's behaviour on a market (eg, pricing algorithms) and those that make markets work (eg, matching algorithms on platforms). The article starts by providing some background and definitions. Then, noting that in most instances, algorithms make companies more competitive or enable supply to better meet demand, bringing a more efficient working of competition, it examines two ways in which algorithms may entail negative effects. First, they may form more efficient tools to implement anti-competitive practices (algorithms as facilitating tools). This is illustrated by a number of competition cases in relation to horizontal, vertical or platform relationships. Second, a number of recent papers argue that algorithms may change the nature of competition. Because of the increased transparency and rationality of choices allowed by algorithms and data, the nature of the competitive game between companies changes. This author does not argue that algorithms are bad once in the wrong hands, but that some of their features may lead the competitive game to outcomes that are worse for consumers. Finally, the article concludes that * Henri Piffaut, Vice-President of the French Competition Authority.

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