On 16 March 2017 EU Commissioner Margrethe Vestager gave a speech on the implications of algorithms on competition. She addressed the issue of automated systems that monitor, and even adjust, prices automatically. Companies can therefore instantly react to price changes in the market.
The sector inquiry into e-commerce has shown that two thirds of retailers who track their competitors’ prices use automatic systems. Some of them also use software to adjust prices automatically. Such automated systems could be used to make price-fixing more effective. The question in this respect is whether such automated systems can be qualified as a collusion tool? Last month, the Commission launched a case which looks at whether four companies broke the competition rules by limiting the ability of retailers to set their own prices for consumer electronics. Part of the concern of the Commission is that software may have made those limitations more effective. The challenge for the Commission and for national competition authorities is how to deal with automated price adjustments. Vestager has called for alertness by the national competition authorities.