Algorithm-Based Pricing in Online Retailing As Concerted Practice Covering the ‘Predictable Agent’ With Article 101 (1) TFEU

Abstract

Algorithm-supported pricing in online retailing markets is increasingly changing the conditions of competition. The enormous speed of price competition in the highly transparent markets of the digital economy, where companies can react significantly faster than consumers, promotes interdependent behavioural strategies between competitors with a tendency towards supracompetitive prices, even in markets that are not oligopolistically structured. Therefore, criteria are worked out in this article under which companies leave the area of market-induced parallel behaviour and instead the use of automated price algorithms can be seen as concerted behaviour within the meaning of Article 101 (1) TFEU.

Keywords: algorithms, competition, concerted practice, predictable agent

JEL Classification: K21