Price Discrimination, Algorithmic Decision-making, and European Non-discrimination Law
European Business Law Review (Forthcoming)
29 Pages Posted: 3 Jul 2019 Last revised: 13 Feb 2020
Date Written: July 2, 2019
Our society can benefit immensely from algorithmic decision-making and similar types of artificial intelligence. But algorithmic decision-making can also have discriminatory effects. This paper examines that problem, using online price differentiation as an example of algorithmic decision-making. With online price differentiation, a company charges different people different prices for identical products, based on information the company has about those people. The main question in this paper is: to what extent can non-discrimination law protect people against online price differentiation? The paper shows that online price differentiation and algorithmic decision-making could lead to indirect discrimination, for instance harming people with a certain ethnicity. Indirect discrimination occurs when a practice is neutral at first glance, but ends up discriminating against people with a protected characteristic, such as ethnicity. In principle, non-discrimination law prohibits indirect discrimination. The paper also shows, however, that non-discrimination law has flaws when applied to algorithmic decision-making. For instance, algorithmic discrimination can remain hidden: people may not realise that they are being discriminated against. And many types of unfair – some might say discriminatory – algorithmic decisions are outside the scope of current non-discrimination law.
Keywords: price discrimination, price differentiation, personalised pricing, dynamic pricing, algorithmic pricing, algorithmic decision-making, big data, artificial intelligence, profiling, fairness, law, equality, non-discrimination law, human rights, fundamental rights
JEL Classification: K12, K00, D10, D11, D20, D30, D40, D60, D70, L00, L11, L20, L51
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