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Impact of Algorithms on Competition

2 June 2023

Competition authorities observed in recent years that the use of algorithms in business related activities, particularly in pricing, can also have negative effects in certain cases, especially by facilitating collusive practices – coordination between competitors to obtain supra-competitive benefits in detriment of consumer welfare.

Algorithms influence a large part of our economic lives, whether we’re thinking about credit interest rate, search engine results, price comparison websites or ridesharing. In all of these circumstances, there are a number of algorithms behind the scenes that determine the information we are shown. It is important to know that there are situations and ways in which algorithms, especially pricing algorithms, can lead to violations of competition rules“, explained Oana.

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