…as pricing systems become ever more autonomous, aspiring monopolists like Mr Topkins eventually will not even need to speak to their competitors to fix prices. Computers will do the colluding for them, either by using the same algorithm or learning from their interactions with other machines — all without leaving behind trails of incriminating emails or voicemails.
“Finding ways to prevent collusion between self-learning algorithms might be one of the biggest challenges that competition law enforcers have ever faced,” said a recent paper by the OECD, the Paris-based club of mostly rich nations.
These digital tools automatically calculate prices based on instantaneous assessments of supply and demand and a seller’s own instructions, such as specific profit or price targets.
…It [the OECD] added: “Particularly in the case of artificial intelligence, there is no legal basis to attribute liability to a computer engineer for having programmed a machine that eventually ‘self-learned’ to co-ordinate prices with other machines.”
That is from David J. Lynch at the FT. Will this prove more or less stable than traditional, human-based collusion? Here are comments from Henry. Can the bots send buyers “we are breaking the collusion now” alerts? Will monitoring third party bots perform that function? Or will collusion reign supreme?