THE ALGORITHMIC ABYSS: ANTITRUST CHALLENGES IN THE

ERA OF AUTONOMOUS COLLUSION

ABSTRACT
The widespread integration of information technology into daily life has brought about an era
where the concept of an algorithmic society is no longer confined to the realm of science
fiction. Particularly within marketplaces and business strategies, there is a notable trend
where an increasing number of companies are utilizing algorithms for dynamic pricing. This
entails the automatic adjustment of prices in response to shifts in market conditions, including
changes in competitor prices. Consequently, the proliferation of algorithmic pricing has
raised concerns regarding competition policy and the potential for collusion. Some
policymakers and scholars are now questioning the efficacy of existing antitrust measures in
addressing this novel form of collusion. Traditionally, antitrust regulations in the European
Union (EU) and the United States (US) have focused on addressing collusion facilitated by
human coordination, which necessitates mutual understanding among firms (often referred to
as a 'meeting of the minds'). However, there is a growing body of literature suggesting that
algorithms have the capacity to coordinate independently and even learn to collude
autonomously. In light of these developments, this paper endeavors to examine whether
current antitrust regulations are equipped to address these emerging challenges. Specifically,
it seeks to explore whether algorithmic interactions (referred to as 'meeting of algorithms')
could be considered akin to human coordination and whether the implementation of new
regulatory tools may be necessary to effectively regulate such behavior.
 INTRODUCTION
The profound impact of AI is evident in how firms leverage algorithms for market trends,
services, and pricing. Known as prediction machines, they rely on training and feedback data
for continuous improvement. In today's algorithm-dominated era, automated decision-making
is commonplace, shaping both consumer interactions and business strategies. 1 Notably, the
European Commission's e-commerce report2 highlights algorithms' transformative role.
However, concerns arise, particularly with self-learning algorithms. These advanced systems,
capable of autonomous adaptation, pose new challenges, including inadvertent facilitation of
collusive behavior. From simple parameters to self-learning capabilities, algorithms wield
significant influence in modern economies.3
4
Traditional antitrust regulations, designed to address human coordination and
communication in collusion, face challenges in regulating algorithmic collusion. 5 While mere
interdependent conduct or tacit collusion without explicit communication has historically
been considered lawful, self-learning algorithms blur the line between lawful and unlawful
behavior. Specifically, algorithms like Q-learning algorithms 6 have the potential to
independently coordinate and learn to collude without human intervention or communication,
thus exacerbating the challenges of regulating collusion effectively 7.The rise of algorithmic
pricing algorithms introduces complexities for competition policy, expanding the grey area
between lawful tacit collusion and unlawful explicit collusion 8. Policymakers must grapple

1
Ajay Agrawal, Joshua Gans, and Avi Goldfard, ‘How to Win with Machine Learning’, (2020) Harvard
Business Review https://hbr.org/2020/09/how-to-win-with-machine-learning accessed 3, April, 2024.
2
European Commission, ‘Final report on the E-commerce Sector Inquiry’, COM(2017) 229 final, para. 13; UK
Competition and Markets Authority, Pricing Algorithms, (2018) 17-18
<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/74635
3/Algorithms_econ_report.pdf> accessed 29, April 2024.
3
Avigdor Gal, ‘It's a Feature, not a Bug: On Learning Algorithms and what they teach us’, (2017) Background
note, OECD Roundtable on Algorithms and Collusion <www.oecd.org/daf/competition/algorithms-and-
collusion.htm> accessed 28 April 2024.
4
Michal S. Gal and Niva Elkin-Koren, ‘Algorithmic Consumers’, (2017) 30 Harvard Journal of Law and
Technology 309
5
OECD, ‘Algorithms and Collusion: Competition Policy in the Digital Age’, (2017)
<www.oecd.org/competition/algorithms-collusion-competition-policy-in-the-digital-age.htm> accessed 1 May
2024
6
Timo Klein, ‘Autonomous algorithmic collusion: Q-learning under sequential pricing’, (2018) Amsterdam
Center for Law & Economics Working Paper No. 05, https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=3195812 accessed 3 May 2024; Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò, and
Sergio Pastorello, ‘Artificial Intelligence, Algorithmic Pricing and Collusion’, (2019)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3304991 accessed 2 May 2024
7
Nicolas Petit, ‘Antitrust and Artificial Intelligence: A Research Agenda’, (2017) 8 Journal of European
Competition Law & Practice 361
8
Salil K. Mehra, ‘Antitrust and the Robo-Seller: Competition in the Time of Algorithms’, (2016) 100
Minnesota Law Review 1323
with these challenges to ensure that antitrust regulations remain effective in addressing
collusive behavior in the digital age.9
The risks associated with algorithmic collusion have sparked a vigorous debate among
scholars, leading to two distinct viewpoints. Some scholars argue that AI collusion is a
credible threat and question the adequacy of current antitrust regulations in addressing
collusion facilitated by algorithms10. They argue that traditional antitrust rules, which rely on
detecting human coordination through meetings and communications, may not be equipped to
identify and challenge these new forms of collusion effectively. This perspective, echoed by
Ezrachi and Stucke, suggests that the increasing reliance on algorithms could fundamentally
disrupt antitrust law, potentially undermining competition.11
On the other hand, some scholars dismiss algorithmic collusion as speculative, citing a lack
of concrete evidence and emphasizing the strict underlying assumptions necessary for its
realization12. They contend that the expanding use of algorithms raises familiar issues for
antitrust enforcers, which can be addressed within existing regulatory frameworks. Maureen
Ohlhausen, a former US FTC Commissioner, advocates this viewpoint, asserting that the use
of algorithms alone does not inherently signify anticompetitive behavior 13. Rather, she
suggests that conduct deemed unlawful before the advent of algorithms is unlikely to be
transformed into lawful behavior simply by employing algorithms.
According to the UK Competition and Markets Authority (CMA), the potential additional
impacts of algorithms are largely speculative, with algorithmic pricing primarily exacerbating
traditional risk factors like transparency and price setting speed, potentially facilitating
collusion in already vulnerable markets. Similarly, the French and German antitrust
authorities, along with the UK Digital Competition Expert Panel, have deemed the current

9
Portuguese Authority, ‘Digital ecosystems, Big Data and Algorithms’,
http://www.concorrencia.pt/vPT/Estudos_e_Publicacoes/Estudos_Economicos/Outros/Documents/Digital
%20Ecosystems,%20Big%20Data%20and%20Algorithms%20-%20Issues%20Paper.pdf, accessed 1 May
2024;
10
Ulrich Schwalbe, ‘Algorithms, Machine Learning, and Collusion’, (2019) 14 Journal of Competition Law &
Economics 568
11
Ariel Ezrachi and Maurice Stucke, Virtual Competition: The Promise and Perils of the Algorithm-Driven
Economy, (2016) Harvard University Press
12
Thibault Schrepel, ‘Collusion by Blockchain and Smart Contracts’, (2019) 33 Harvard Journal of Law &
Technology 117
13
Maureen K. Ohlhausen, ‘Should We Fear The Things That Go Beep in the Night? Some Initial Thoughts on
the Intersection of Antitrust Law and Algorithmic Pricing’, (2017) 11
https://www.ftc.gov/public-statements/2017/05/should-we-fear-things-go-beep-night-some-initial-thoughts-
intersection accessed 1 September 2020;UK Digital Competition Expert Panel, ‘Unlocking digital competition’,
(2019) https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/
785547/unlocking_digital_competition_furman_review_web.pdf accessed 2 May 2024
legal framework adequate to address competitive concerns, while remaining open to revising
regulations should evidence of algorithmic collusion emerge.14
However, recent initiatives such as the European Commission's public consultation on the
necessity for a new competition tool suggest a growing recognition of the potential risks
posed by algorithmic collusion.15
Against this backdrop, the article aims to delve into this contentious issue, assessing the
suitability of current antitrust rules in addressing the challenges posed by AI, considering
whether algorithmic interactions could be treated similarly to human coordination, and
evaluating the need for new regulatory tools.16

1. COLLUSION: THEORETICAL FOUNDATIONS AND ANTITRUST IMPLICATIONS

Collusion, the coordination among rivals to maximize joint profits by aligning prices and
output, is a critical concept in economics and antitrust law. In oligopolistic markets, where
firms' decisions are interdependent, collusive outcomes can be achieved through explicit
agreements or tacit understandings17. Despite the awareness of mutual interdependence,
maintaining cooperation is challenging due to incentives for individual firms to cheat. The
stability of collusive equilibrium over time depends on various market conditions such as
concentration, barriers to entry, cost structures, and demand patterns. Antitrust law addresses
the means used to achieve collusive outcomes rather than prohibiting collusion outright.
European law, under Article 101 TFEU 18, covers agreements, decisions, and concerted
practices, while the US Sherman Act targets contracts, combinations, and conspiracies.
Conscious parallelism, resulting from oligopolistic awareness, is not prohibited as firms have
the right to adapt to market conditions intelligently. Case law emphasizes the need for a
14
European Commission, ‘Final report on the E-commerce Sector Inquiry’, COM(2017) 229 final, para. 13. See
also UK Competition and Markets Authority, Pricing Algorithms, (2018) 17-18
<https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/74635
3/Algorithms_econ_report.pdf>
15
Id;Ibrahim Abada and Xavier Lambin, ‘Artificial intelligence: Can seemingly collusive outcomes be
avoided?’, (2020) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3559308 accessed 4 May 2024;
Stephanie Assad, Robert Clark, Daniel Ershov, and Lei Xu, ‘Algorithmic Pricing and Competition: Empirical
Evidence from the German Retail Gasoline Market’, (2020) CESifo Working Paper No. 8521
https://www.cesifo.org/en/publikationen/2020/working-paper/algorithmic-pricing-and-competition-empirical-
evidence-german accessed 1 May 2024
16
Zach Y. Brown and Alexander MacKay, ‘Competition in Pricing Algorithms’, (2020) Harvard Business
School Working Paper No. 67, https://hbswk.hbs.edu/item/competition-in-pricing-algorithms.
17
Luke Garrod and Matthew Olczak, ‘Explicit vs tacit collusion: The effects of firm numbers and asymmetries’
(2018) 56 International Journal of Industrial Organization
18
Article 101 covers agreements and anti-competitive practices that might affect "trade between Member
States".
"meeting of minds" or a unity of purpose to establish an agreement 19. The concept of
concerted practices in the EU includes direct or indirect contacts aimed at influencing other
firms' conduct. Courts differentiate between agreements and concerted practices based on
intensity and manifestation20. Intermediate forms of coordination are addressed through plus
factors and facilitating practices, such as price announcements and information exchanges,
indicating potential collusion. Courts intervene when such elements suggest that firms have
not acted independently21.
Understanding collusion and its legal implications is crucial for ensuring fair competition and
market efficiency. Businesses in oligopoly markets (where a few firms dominate) can
sometimes coordinate their actions without formally agreeing to do so 22. This type of
coordination, known as tacit collusion, has been a challenge for authorities tasked with
preventing anticompetitive behavior. Because of this, there's been debate about the traditional
idea of an agreement, which is seen as too rigid and disconnected from how modern
oligopolies operate.
Some experts propose broadening the definition of agreement to include any behavior that
leads to oligopoly-level prices, regardless of whether there's a formal agreement in place.
This perspective argues that regardless of how the coordination happens, the result is the
same: higher prices for consumers23. The discussion has gained new relevance with the
increased use of algorithms in business decision-making. Some believe that algorithms not
only make collusion more likely but can also learn to collude on their own over time. This
means they could sustain collusive behavior without direct human involvement. If this
becomes a reality, it could worsen the problem of oligopolies by making tacit collusion more
widespread and harder to detect under current antitrust laws.

2. IMPLEMENTATIONS OF ALGORITHMS: SCENARIOS AND OBSTACLES FOR COMPETITION

LAW POLICY.
As mentioned before, one common belief is that algorithms can encourage collusion by
making agreements between competitors more stable, whether they're explicit or not.
19
European Court of Justice, 16 December 1975, Joined Cases 40-48, 50, 54-56, 111, 113 and 114/73, Suiker
Unie v. Commission, para. 174.
20
European Court of Justice, 14 July 1972, Cases C-48, 49, 51-57/69, ICI v. Commission (Dyestuff). European
Court of Justice, 4 June 2009, Case C-8/08, T-Mobile Netherlands and others v. NMa
21
EU General Court, 26 October 2000, Case T-41/96, Bayer AG v. Commission, paras. 69 and 173.
22
Interstate Circuit Inc. v. U.S., 306 US 208, 810 (1939); American Tobacco Co. v. U.S., 328 U.S. 781, 809–10
(1946); Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768 (1984).
23
Kaplow, Louis, ‘On the Meaning of Horizontal Agreements in Competition Law’ (2011) 99 California Law
Review 683
Algorithms might impact the factors and market conditions that typically support collusive
agreements among rival companies, as outlined in economic studies.24
Algorithms can make collusion easier by lowering coordination costs, even in less crowded
markets, which makes the number of companies in the market less important. 25 They can also
enhance market transparency by quickly analyzing large volumes of data, making it easier to
spot deviations. Additionally, algorithms can speed up the processing of market data, leading
to more frequent interactions and swift price adjustments to punish deviations. But, their
impact on entry barriers is uncertain. While algorithms can decrease entry barriers by
enabling dynamic pricing strategies, the need for vast amounts of data may actually raise
these barriers.
However, there are also opposing effects. The innovative nature of algorithms could lead to
more diverse products and services, allowing companies to create new business models. This
could increase differences among market players, making it harder to align their interests and
maintain collusion. Consequently, the stability of collusive agreements could suffer. 26 In such
cases, algorithms might be used to facilitate explicit collusion by acting as messengers
between companies or monitoring their behavior to ensure compliance with the agreement. 27
This could strengthen the stability of collusive agreements by improving detection and
response to deviations, and reducing the likelihood of errors or non-compliance within
firms.28
Real-life cases have demonstrated how antitrust authorities have uncovered cartels using
dynamic pricing algorithms. These algorithms monitor market dynamics and automatically
adjust prices to prevent undercutting by conspiring companies.29
The US Department of Justice, in Topkin, and the UK CMA, in Trod, discovered evidence of
anti-competitive practices in the retail sales of posters and frames on Amazon. This was
facilitated by automated repricing software that adjusted prices to prevent undercutting
between companies.30 While repricing software is typically used by online sellers to compete,
in these cases, it was manipulated by conspirators to restrict price competition and enforce
24
Emilio Calvano, Giacomo Calzolari, Vincenzo Denicolò, and Sergio Pastorello, “Artificial Intelligence,
Algorithmic Pricing, and Collusion,” American Economic Review, vol. 110, no. 10, October 2020, pp. 3267-97.
25
Id
26
“Autonomous algorithmic collusion: Economic research and policy implications,” Toulouse School of
Economics.
27
“ALGORITHMS, MACHINE LEARNING, AND COLLUSION,” Oxford Academic, June 13, 2019.
28
Beneke, Francisco, and Mark-Oliver Mackenrodt. “Remedies for algorithmic tacit collusion.” Journal of
Antitrust Enforcement, Volume 9, Issue 1, March 2021, Pages 152–176.
29
Dorner, Florian E. “Algorithmic collusion: A critical review.” Institute of Science, Technology and Policy,
ETH Zurich.
30
OECD. "Algorithms and Collusion - Background Note by the Secretariat."4.
collusive agreements. Similarly, the European Commission fined four consumer electronics
manufacturers for fixing resale prices using pricing algorithms. 31 These manufacturers
monitored and adjusted retail prices to match competitors, impacting overall online prices for
their products. Advanced monitoring tools enabled swift intervention in case of price
decreases.32
In this situation, algorithms are simply tools used to support and enforce an existing
coordination among humans, rather than driving the collusion themselves. Therefore,
antitrust authorities can assess this behavior using the standard definition of agreement and
concerted practice without encountering any issues.33
Pricing algorithms can potentially facilitate tacit coordination, expanding collusion beyond
oligopolistic markets. This can occur through several means: companies might use algorithms
independently to facilitate conscious parallelism, third-party algorithms could enable
collusive outcomes, and self-learning algorithms might autonomously engage in collusion.34
In the first scenario, competitors adopt the same algorithmic pricing model, while third-party
algorithm providers serve as intermediaries, enabling coordination without direct
communication.35 This arrangement, known as a hub-and-spoke scenario, involves a
facilitating firm (the hub) organizing collusion among companies (the spokes) through
vertical restraints.36 French and German antitrust authorities differentiate between alignment
at the code level, where companies delegate strategic decisions to a common third party, and
alignment at the data level, where rivals exchange information or share a common data pool
facilitated by a software supplier.37
The UK CMA views the hub-and-spoke conspiracy scenario as a significant concern, but it
can be addressed under current antitrust regulations. 38 Proving a hub-and-spoke cartel
requires evidence of horizontal agreements among the companies involved. However, two
31
Hanspach, Philip & Galli, Niccolò, “Collusion by Pricing Algorithms in Competition Law and Economics,”
Robert Schuman Centre for Advanced Studies Research Paper No. 2024_06 (2024).
32
Yaholnyk, Antonina & Zeleniuk, Anastasia, “Antitrust Implications of Using Pricing Algorithms,” Chambers
and Partners (2020).
33
Siciliani, Paolo, “Tackling Algorithmic-Facilitated Tacit Collusion in a Proportionate Way,” Journal of
European Competition Law & Practice, Volume 10, Issue 1, Pages 31–35 (2019).
34
Beneke, Francisco & Mackenrodt, Mark-Oliver, “Remedies for algorithmic tacit collusion,” Journal of
Antitrust Enforcement, Volume 9, Issue 1, Pages 152–176 (2021).
35
Firoozi, Roya & Ferranti, Laura, et al. “A Distributed Multi-Robot Coordination Algorithm for Navigation in
Tight Environments,” Robert Schuman Centre for Advanced Studies Research Paper No. 2024_06 (2024).
36
Fortin, John. “Algorithms and Conscious Parallelism: Why Current Antitrust Doctrine is Prepared for the
Twenty-First Century Challenges Posed by Dynamic Pricing,” Tulane Journal of Technology & Intellectual
Property, Vol. 23 (2020).
37
Macy, Creighton & Graulich, Dan, et al. “Antitrust Compliance and Pricing Algorithms,” Baker McKenzie,
and Bester, Matthew, Accenture (2019).
38
Gould, Brandon & Gweon, August, et al. “Competition & Collusion in a World of Algorithmic Pricing:
Antitrust Risks & Enforcement Trends,” Covington & Burling LLP (2024).
other scenarios pose greater challenges for antitrust enforcement. Firstly, companies may
independently design pricing algorithms to respond to competitors' pricing, leading to a form
of tacit coordination known as conscious parallelism. Secondly, algorithms may
autonomously learn to coordinate without human intervention or communication. In the
former case, antitrust authorities must consider whether algorithmic interaction constitutes
coordination, possibly facilitated by signaling practices. 39 In the latter case, attributing
algorithmic conduct to a specific firm may be challenging due to the absence of human
involvement and communication between algorithms.40
Algorithms can also yield positive effects for competition. They enhance both static and
dynamic efficiencies, allowing firms to cut transaction and production costs, improve existing
products, and innovate new ones. Additionally, on the consumer side, algorithms empower
buyers by providing more information and tools, encouraging engagement, awareness, and
informed decision-making. Moreover, algorithmic systems can aid in detecting collusion
between firms to ensure competitive pricing. For instance, in the Webtaxi case, the
Luxembourg Competition Authority recently approved an agreement where taxi operators
collectively set fares using an algorithm provided by a booking platform. 41 The authority
deemed the efficiency gains from the algorithmic pricing model to outweigh any anti-
competitive concerns. The agreement allowed for better resource allocation, reducing empty
rides, pollution, and providing customers with a consistent, round-the-clock service
offering.42
The European Commission's recent White Paper on Artificial Intelligence emphasizes that AI
can serve as a valuable asset for antitrust enforcement. With its ability to handle vast amounts
of data and recognize patterns, AI presents significant opportunities for enhancing
competition law enforcement.43 Therefore, antitrust authorities may increasingly utilize
algorithms and AI-driven analytical tools in their operations.44

3. SHOULD WE CONSIDER IMPLEMENTING ALGORITHMIC ANTITRUST MEASURES?

39
Deng, Ai. “Algorithmic Collusion and Algorithmic Compliance: Risks and Opportunities,” The Global
Antitrust Institute Report on the Digital Economy 27 (2020).
40
Supra Note 15.
41
‘Algorithmic Price-Fixing Arrangement Justified on Efficiency Grounds’ MLL Legal Ltd Luxembourg,
Switzerland (2018).
42
Peter Georg Picht and Benedikt Freund, ‘Competition (Law) in the Era of Algorithms’ Max Planck Institute
for Innovation & Competition Research Paper No. 18-10 (2018)2.
43
‘Algorithmic Price-Fixing Arrangement Justified on Efficiency Grounds’ MLL Legal Ltd Luxembourg,
Switzerland (2018).
44
Ankit Sharma, ‘Algorithmic Cartels and Economic Efficiencies: Decoding the Indian & EU Perspective’ 17
NUALS Law Journal 137 (2023).
The analysis conducted in the previous section sheds light on various scenarios where
algorithms could facilitate coordination among firms. Antitrust authorities have successfully
addressed cases where algorithms were employed to aid explicit collusion or where third-
party algorithm providers acted as hubs in conspiracies. 45 However, challenges arise when
dealing with automated systems that react to each other or self-learning algorithms capable of
tacit coordination. Although no real cases of these scenarios have emerged, some scholars
advocate for modifying current antitrust rules to adapt to the growing use of algorithms. In
essence, according to Ezrachi and Stucke, we are witnessing a transformation in competition
dynamics.46
Heinemann and Gebicka suggest that antitrust regulators should reconsider the definitions of
agreement and concerted practice. The OECD supports a clearer definition of agreement,
although it's uncertain whether algorithmic interactions should be treated similarly to human
agreements.47 Gal finds it problematic to categorize the adoption of algorithms as facilitating
practices. Since algorithms serve various functions and can offer benefits, it's crucial to assess
whether they are justified by pro-competitive reasons, while balancing against anti-
competitive risks. Defining the prohibition clearly to provide legal certainty to market players
is also challenging.48 Thomas proposes integrating economic effects analysis into the notion
of concerted practices, while Siciliani suggests using established price-cost tests to determine
the legitimacy of price-matching algorithms in antitrust enforcement. 49
Other scholars propose preemptive measures instead of traditional antitrust approaches.
Ezrachi and Stucke suggest testing algorithmic collusion in controlled environments like a
regulatory sandbox and conducting market investigations to understand how algorithms
operate. Harrington proposes making collusion illegal by examining the code of artificial
agents rather than their communication. 50 He suggests creating a blacklist of algorithms
inherently unlawful based on their design.51 Zheng and Wu advocate for a market-based

45
Ariel Ezrachi and Maurice E. Stucke, ‘Two Artificial Neural Networks Meet in an Online Hub and Change
the Future (Of Competition, Market Dynamics and Society)’ (2017).
46
Id.
47
Andreas Heinemann, 'Behavioural Antitrust - A ‘More Realistic Approach’ to Competition Law’ in Klaus
Mathis (ed), European Perspectives on Behavioural Law and Economics (Springer 2015).
48
Stefan Thomas, ‘HARMFUL SIGNALS: CARTEL PROHIBITION AND OLIGOPOLY THEORY IN THE
AGE OF MACHINE LEARNING’ (2019) 15 Journal of Competition Law & Economics.
49
Paolo Siciliani, ‘Tackling Algorithmic-Facilitated Tacit Collusion in a Proportionate Way’ (2019) 10 Journal
of European Competition Law & Practice.
50
Joseph E. Harrington Jr, ‘Developing Competition Law for Collusion by Autonomous Price-Setting Agents’
(2017).
51
Supra Note 16.
regulatory approach, suggesting the imposition of a Pigouvian tax on the negative externality
of competition caused by algorithmic pricing. Lamontanaro recommends implementing a
whistleblower bounty program to enhance the detection of algorithmic cartels and help
authorities enforce antitrust laws while fostering innovation.52
Some scholars propose a concept of algorithmic compliance, where companies must ensure
their pricing algorithms are designed to comply with antitrust laws rather than facilitate
collusion.53 The European Commission is exploring a regulatory approach to address
concerns about algorithmic transparency and potential market distortions, particularly in
oligopolistic markets. However, there is uncertainty about the scope and remedies of this
approach. While the Commission has investigative powers to address algorithmic issues,
competition authorities have generally taken a wait-and-see approach, noting a lack of
evidence of algorithmic collusion.54
Some competition authorities are taking steps to address concerns about algorithmic
collusion, such as the creation of specialized units and trials to monitor algorithmic
behavior.55 However, some scholars argue that empirical evidence on algorithmic collusion is
lacking, and predictions in the literature may overlook the complexity of real business
dynamics. While some studies suggest AI adoption can increase prices and margins in certain
markets, others question the extent of algorithmic collusion and its impact on competition. 56
Given the current landscape, it's prudent to approach the issue of algorithmic collusion with
caution. While existing antitrust regulations are effective in addressing explicit collusion and
hub-and-spoke conspiracies facilitated by algorithms, the overall impact of algorithms on
collusion dynamics is uncertain. While algorithms can streamline coordination and
enforcement, there are also factors that could disrupt collusive arrangements. With limited
evidence and real-world cases of algorithmic collusion, it's sensible for competition
authorities to take a wait-and-see approach. It's premature to advocate for antitrust reform or
legislative actions until the actual occurrence of algorithmic collusion becomes clearer.

CONCLUSION

52
Zheng, Zhiyuan and Wu, Jing, ‘Market-Based Regulatory Approaches to Algorithmic Collusion: A Pigouvian
Tax Perspective’ (2023).
53
Competition Law and Competition Policy in India: How the Competition Commission has Dealt with
Anticompetitive Restraints by Government Entities’ (2018).
54
Sara Fish, Yannai A. Gonczarowski, and Ran Shorrer, ‘Algorithmic Collusion by Large Language Models’
(2024).
55
Florian E. Dorner, ‘Algorithmic collusion: A critical review’ (2021).
56
Francisco Beneke and Mark-Oliver Mackenrodt, ‘Remedies for algorithmic tacit collusion’ (2021).
While the European Commission has expressed readiness to intervene in markets with
potential algorithmic collusion risks, recent proposals indicate a shift to a cautious stance.
The proposed Regulation on fair digital markets focuses on designating gatekeepers rather
than directly addressing algorithmic coordination. Furthermore, given the absence of concrete
evidence of algorithmic collusion, existing antitrust rules remain sufficient, as affirmed by
British, French, and German competition authorities. Attention is also drawn to potential
anticompetitive risks associated with blockchain technology, which could complicate
enforcement efforts due to its decentralized nature. US antitrust enforcers have begun
recognizing both the opportunities and challenges posed by blockchain, underscoring the
need for further research in this domain. Therefore, while concerns persist regarding
algorithmic impact on competition, a balanced approach is warranted, combining regulatory
intervention with ongoing research into emerging technologies.