Automatic price fixing increasingly takes place on online platforms such as Amazon. Here, Artificial Intelligence (AI) systems are used more and more to monitor the prices of competitors and set apply that to their platforms prices. While such market observation and reaction is immanent to competition and therefore permissible under cartel law (so-called “parallel behaviour”), an agreement on prices (collusion) is prohibited by competition law.
Recent research literature on artificial intelligence suggests that AIs are generally capable of developing agreement strategies, even if they are not explicitly programmed to do so. This raises questions on how to deal with this potential for (illegal) price fixing by AIs.
Within the framework of this project it is to be investigated (1) which pricing algorithms has the potential to independently develop cooperation strategies and how it can be implemented on the basis of the current the legal situation. Based on this, legal and technical solutions are designed in order to (2) automatically discover such cooperations. Finally, a legal framework and strategies will be developed, on how (3) AI-based price fixing can be technically prevented.
The project is funded by the German Baden-Württemberg Stiftung (BW-Stiftung) under the funding scheme responsible artificial intelligence with a funding amount of 383.000 €.
Personnel at University of Mannheim