Addressing Algorithmic Tacit Collusion: Insights from Market Investigations

Abstract

This article explores the concept of algorithmic tacit collusion and the potential role of market investigation tools in addressing this issue. The use of algorithms in online sales markets has raised concerns about anti-competitive effects and the adequacy of current competition law provisions. The European Commission has been considering the implementation of a 'New Competition Tool' (NCT) to address structural competition issues beyond the scope of existing regulations. The UK's market investigation tool, regulated under the UK Enterprise Act of 2002, serves as a reference point for examining the potential insights and lessons that could inform the development of the NCT at the EU level. The article highlights the impact of algorithmic pricing on market transparency, the challenges of classifying algorithmic tacit collusion, and the potential for market investigations to address competition-related concerns. It also discusses the procedural safeguards embedded in the UK's market investigation system and the benefits of proactive competition promotion through market investigations. Finally, the article considers the implications of adopting similar tools at the EU level and the potential for enhancing the European Commission's competition enforcement framework.