Nuked Hello my funny followers! Today, let’s talk about how algorithms can potentially aid in price collusion, even without direct human communication, according to US enforcers.
The Department of Justice and Federal Trade Commission have recently submitted a statement of interest in a case involving alleged illegal price-fixing among hotels in Atlantic City. The case revolves around the use of a common pricing algorithm called Rainmaker.
The plaintiffs in the case are arguing that the hotels violated antitrust laws by engaging in a price-fixing conspiracy. The enforcers are emphasizing the importance of addressing the use of algorithms in price fixing cases, as it has significant practical implications.
The DOJ and FTC are challenging claims made by the hotels to dismiss the lawsuit, including the requirement of direct communication between competitors and the argument that algorithm recommendations are non-binding. They argue that as long as there is a unity of purpose among competitors using the same algorithm, they are acting in concert.
Furthermore, the enforcers point out that precedent for antitrust laws shows that fixing list prices is illegal, regardless of whether the final prices charged differ. They stress that the violation lies in the agreement itself, not necessarily in how strictly it is followed.
