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Algorithms and collusion – EU DG COMP – June 2017 OECD discussion

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This presentation by the EU DG Competition was made during the discussion “Algorithms and collusion” held at the 127th meeting of the OECD Competition Committee on 23 June 2017. More papers and presentations on the topic can be found out at oe.cd/1-0.

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Algorithms and collusion – EU DG COMP – June 2017 OECD discussion

  1. 1. Cyril Ritter European Commission DG Competition OECD, 23 June 2017 Algorithms and collusion 1
  2. 2. Digital decision-making  Data • Data protection concerns • Data accumulation concerns  Algorithms • Concerns about personalisation – Filter bubble/echo chambers – Personalised pricing • Collusion – Horizontal/vertical – Explicit/tacit
  3. 3. Digital decision-making  Data • Data protection concerns • Data accumulation concerns  Algorithms • Concerns about personalisation – Filter bubble/echo chambers – Personalised pricing • Collusion – Horizontal/vertical – Explicit/tacit  Today
  4. 4. Digital decision-making  Data • Data protection concerns • Data accumulation concerns  Algorithms • Concerns about personalisation – Filter bubble/echo chambers – Personalised pricing • Collusion – Horizontal/vertical – Explicit/tacit 2016 OECD meeting & presentation  Today
  5. 5. Factual findings in E-Commerce Sector Inquiry Report  53% of responding retailers track online prices of competitors, of which • 67% with software • 78% subsequently adjust prices
  6. 6. Algorithms: general principles of competition analysis  Fact-specific, case-by-case analysis  Apply existing principles but ready to adapt  What's illegal offline likely to be illegal online  Algorithm cannot shield firm from liability
  7. 7. Algorithms in a vertical context  Monitoring contributing to the effectiveness of RPM  Monitoring + pressure enable producer to turn recommended prices into RPM  Spreading RPM from RPM resellers to non- RPM resellers, because of price matching
  8. 8. Algorithms in a horizontal context  Monitoring pre-existing explicit collusion  Implementing pre-existing explicit collusion  Engaging in explicit collusion • Colluding on pricing parameters • Hub and spoke • Outsourcing pricing to common agent • Signalling (e.g. through coded messages) • Autonomous explicit collusion?  Engaging in tacit collusion • Relevant to merger control • Offence under Article 101?

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