Baker McKenzie's Creighton Macy, Jeffrey Martino, Mark Weiss, Ashley Eickhof and Allison Simkins authored an article for the American Bar Association's Criminal Justice Magazine on the risk of algorithmic price fixing and the steps that companies can take to ensure regulatory compliance.
When it comes to reviewing and adjusting pricing strategies, sophisticated algorithms and other data analyzing tools can provide businesses with incredible efficiencies and cost savings, the authors wrote. They can enhance the consumer experience too. The dynamic nature and ability to learn is what makes these tools so valuable; it is also what gives them the potential to facilitate illegal collusion. Risk of unintentional illegal behavior is greatest in situations where non-public information is being shared with pricing algorithms and when companies delegate their pricing authority to these tools.
As the technology continues to evolve and become more sophisticated, antitrust enforcement efforts are ramping up. The authors note that the, "DOJ appears to be signaling an aggressive enforcement agenda aimed at the use of common pricing algorithms." The piece suggests ways to develop a robust compliance program that can help companies mitigate the potential risk of antitrust lawsuits and investigations.
The full article can be read here.