Friday, March 1, 2024

Coordination in the Fight against Collusion

Coordination in the Fight against Collusion

Elisabetta Iossa, Simon Loertscher, Leslie M. Marx and Patrick Rey

While antitrust authorities strive to detect, prosecute, and thereby deter collusive conduct, entities harmed by that conduct are also advised to pursue their own strategies to deter collusion. The implications of such delegation of deterrence have largely been ignored, however. In a procurement context, we find that buyers may prefer to accommodate rather than deter collusion among their suppliers. We also show that a multimarket buyer, such as a centralized procurement authority, may optimally deter collusion when multiple independent buyers would not, consistent with the view that "large" buyers are less susceptible to collusion.

March 1, 2024 | Permalink | Comments (0)

Thursday, February 29, 2024

The Competitive Effects of Superstore Entry: The Role of Product Variety

The Competitive Effects of Superstore Entry: The Role of Product Variety

Sebastian Oschmann

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Abstract

This study empirically examines the impact of Superstore entries on product variety in the United States supermarket industry. By using a rich retail panel from 2006 to 2016 and a data set documenting Superstore locations and opening dates, this study employs a difference-in-differences estimator to compare stores that experience a Superstore entry with those that do not. The results show that affected supermarkets decrease product variety by~3.5~\% in non-food categories following a Superstore entry, while no significant effect is observed for food categories. The findings indicate that the adjustment in variety is associated with the pricing strategy adopted by retailers. Retailers implementing a uniform pricing strategy or regional pricing strategy reduce their product variety at the store level in response to a Superstore entry, while stores employing local pricing do not. These findings highlight the strategic importance of assortment for supermarkets.

February 29, 2024 | Permalink | Comments (0)

Wednesday, February 28, 2024

The Antitrust Case Against Live Nation Entertainment

The Antitrust Case Against Live Nation Entertainment

 

Michael A. Carrier

Rutgers Law School

Abstract

In November 2022, millions of Taylor Swift fans were angry. For the first time since 2018, Swift was going on tour. Demand was through the roof. But the process of getting tickets was a disaster. Fans waited in a queue for hours before being kicked out and were prevented from buying tickets until the general public sale, which was then canceled. Nor is that unique, as many fans have suffered a “Ticketmaster horror story” of disappearing tickets and “jumping” prices.

Live Nation Entertainment, the combination of promoter Live Nation and ticketing company Ticketmaster, blamed unexpected demand.

The company had every reason to cast blame elsewhere. But it also had no reason to care about quality. As a monopolist, it was not subject to a competitive marketplace. It could offer a bad product and not worry about customers fleeing from bots and cyberattacks. In fact, it could continue raising price.

Ticketmaster has had control over the ticketing market for decades. And after its merger with Live Nation, the top U.S. entertainment provider, in 2010, its power expanded into promotion, where it has relationships with many of the top artists. Together, the combined company appears to have engaged in multiple antitrust violations.

For starters, Ticketmaster harmed ticketing rivals by locking venues into multiyear contracts to take its ticketing services. This is “exclusive dealing.” For any venues not part of these arrangements, the company threatened: “You want our artist? You must take our tickets.” This is a classic “tying” violation.

It engaged in deception when it used “deceptive bait-and-switch tactics” in selling tickets to fans that led to a settlement with the Federal Trade Commission (FTC). Putting together all of these—and other—actions presents an overall course of conduct that constitutes monopolization.

The typical remedies for antitrust violations lean toward the modest rather than aggressive side, such as an injunction to stop engaging in particular conduct like tying or exclusive dealing. This case is different. The 2010 merger of Ticketmaster and Live Nation required the company to do certain things, like not forcing venues wishing to book Live Nation artists to use Ticketmaster’s ticketing. But there were so many breaches that the consent decree was extended. Given its numerous blatant violations, the company cannot be trusted to undertake actions a court might compel. For that reason, a breakup of Ticketmaster and Live Nation should be the preferred remedy. Additional remedies could require the company to sell venues and end the exclusive dealing arrangements, include injunctive relief against deceptive conduct, and address behavior that is part of the overall course of conduct.

Taylor Swift fans rightly were upset when Ticketmaster bungled the rollout of tickets for her 2022 tour. We should all be upset. This Article highlights the strong antitrust case against the company and remedy that can fix this.

February 28, 2024 | Permalink | Comments (0)

Tuesday, February 27, 2024

Exploitative Abuses: The Scope and the Limits of Article 102 TFEU

Exploitative Abuses: The Scope and the Limits of Article 102 TFEU

 

Giorgio Monti

Tilburg Law and Economics Center (TILEC)

Alexandre de Streel

University of Namur; Centre on Regulation in Europe (CERRE)

Abstract

This paper establishes the scope and principles for the application of Article 102 TFEU to exploitative abuse, in light of the increased interest in applying this provision against dominant digital platforms. After establishing the policy challenges to using competition law to address unfair conduct by dominant undertakings, we show the importance of establishing precise scope and limiting principles. By a comprehensive study of Commission decisions and judgments of the European Court of Justice that pertain to exploitative abuse we derive limiting principles for each type of abuse and then generalise these into some overarching principles for all exploitative abuse cases. We test these limiting principles against decisions of the German and French competition authorities in cases considering the terms of trade between platforms and press publishers. Finally, we examine the design of remedies and reflect on the imposition of procedural remedies to address exploitative abuses and the opportunities and risks this generates.

February 27, 2024 | Permalink | Comments (0)

Monday, February 26, 2024

Multibrand Price Dispersion

Multibrand Price Dispersion

By:

Mark Armstrong; John Vickers

Abstract:

We study a market in which several firms potentially each supply a number of “brands” of fundamentally the same product. In fashion, for example, a single firm might retail similar items under different labels and different prices. Consumers differ in which products they consider for their purchase, and firms compete using (multi-dimensional) mixed pricing strategies for their brands. Using relative elasticity conditions, we discuss when firms choose to offer uniform pricing across their brands, and when they use segmented pricing so that one “discount” brand is always priced below another. We solve duopoly models in which equilibria can be derived for all parameters. We discuss the impact of introducing a new brand, of imposing a requirement to set uniform prices across a firm’s brands, and of mergers between single-brand firms.

URL:

http://d.repec.org/n?u=RePEc:oxf:wpaper:1029&r=ind

February 26, 2024 | Permalink | Comments (0)

Friday, February 23, 2024

Artificial Intelligence and Antitrust Webinar - Wednesday, March 6th at 9:00am (PT)/ 12:00pm (ET)

At USC Gould School of Law, we have a great upcoming webinar on antitrust and AI with Sheila R. Adams James (Davis Polk & Wardwell LLP), Jamillia Ferris (Freshfields Bruckhaus Deringer) and Dokyun Lee (Questrom School of Business, Boston University) Wednesday, March 6 — 9-10am PT / Noon–1pm ET.

 Please RSVP by registering here

 

 

 

February 23, 2024 | Permalink | Comments (0)

Governance and Regulation of Platforms

Governance and Regulation of Platforms

By:

Martin Peitz

Abstract:

In this chapter, we discuss how platforms manage the interaction between various users. First, we discuss and exemplify governance decisions by platforms that affect access and interactions of users regarding a platform service. Here, we investigate the choice of price structure and the choice of non-price strategies. We also address the horizontal and vertical scope of these platforms. Second, we consider platform decisions that generate spillovers to other platforms or channels, and we explore private incentives and welfare effects. Third, we discuss the role of government regulation in a broad sense, that is, the laws and regulations that constrain platforms and shape their incentives regarding their governance decisions. Emphasis is given to interventions against anti-competitive conduct and practices that may lead to consumer harm.

URL:

http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_480&r=ind

February 23, 2024 | Permalink | Comments (0)

Thursday, February 22, 2024

Competition, Privacy, and Multi-Homing

Competition, Privacy, and Multi-Homing

By:

Jean-Marc Zogheib

Abstract:

Two digital firms compete in prices and information disclosure levels. A consumer signing up to one firm's service decides how much personal information to provide. We find that firms essentially trade-off between consumer valuations and disclosure levels to determine their business strategies when consumers single-home. Under multi-homing, business strategies are more complex to assess and may completely shift compared to single-homing. All things being equal, implementing a strict privacy regime with no data disclosure can be optimal under single-homing, while a soft privacy regime with data disclosure may be preferred under multi-homing.

URL:

http://d.repec.org/n?u=RePEc:drm:wpaper:2023-34&r=ind

February 22, 2024 | Permalink | Comments (0)

Wednesday, February 21, 2024

Multibrand price dispersion

Multibrand price dispersion

By:

Armstrong, Mark; John, Vickers

Abstract:

We study a market in which several firms potentially each supply a number of "brands" of fundamentally the same product. In fashion, for example, a single firm might retail similar items under different labels and different prices. Consumers differ in which products they consider for their purchase, and firms compete using (multi-dimensional) mixed pricing strategies for their brands. Using relative elasticity conditions, we discuss when firms choose to offer uniform pricing across their brands, and when they use segmented pricing so that one "discount" brand is always priced below another. We solve duopoly models in which equilibria can be derived for all parameters. We discuss the impact of introducing a new brand, of imposing a requirement to set uniform prices across a firm's brands, and of mergers between single-brand firms.

URL:

http://d.repec.org/n?u=RePEc:pra:mprapa:119322&r=ind

February 21, 2024 | Permalink | Comments (0)

Tuesday, February 20, 2024

Prices and Mergers in a General Model of Multi-Sided Markets

Prices and Mergers in a General Model of Multi-Sided Markets

By:

Raúl Bajo-Buenestado; Markus Kinateder; Raul Bajo-Buenestado

Abstract:

We present a general and tractable oligopoly model of multi-sided platforms with endogenous side and platform choices of heterogeneous end-users, considering any mix of single-homing and multi-homing platforms and in which participating on one side could preclude doing so on others. We show the existence of a unique equilibrium number of end-users and characterize optimal platform pricing. Using the equilibrium conditions, we formally derive (across sides and platforms) switching effects that distort optimal pricing, which can lead to markups exceeding the Lerner index and rule out the classical “cross-subsidization” result. We then provide a unifying framework to analyze multi-sided platform mergers, which rationalizes mixed results from the previous literature by providing, based on the switching effects, a set of conditions that predict the upward pricing pressure post-merger. We show that while optimal pricing is determined by the nature of end-users’ side choices, their platform choices are crucial for merger analysis.

Keywords:

multi-sided markets, heterogeneous end-users, endogenous side choice, mergers of platforms, digital platforms

URL:

http://d.repec.org/n?u=RePEc:ces:ceswps:_10818&r=ind

February 20, 2024 | Permalink | Comments (0)

Monday, February 19, 2024

Price Caps by Matching Platforms: The Case of Ticket Resales

Price Caps by Matching Platforms: The Case of Ticket Resales

Da He

Hong Kong University of Science & Technology (HKUST) - Department of Marketing

Song Lin

Hong Kong University of Science & Technology (HKUST) - Department of Marketing; Hong Kong University of Science & Technology (HKUST); Hong Kong University of Science and Technology

ABSTRACT: In recent years, a growing number of ticket resale platforms have imposed price caps on ticket trading. This practice has been perceived to protect consumer welfare, at the expense of less platform profit. However, we show that this self-regulation can counter-intuitively hurt consumers while benefiting ticket trading platforms, even if consumers are fully rational and unconcerned with price fairness. We demonstrate how this result may arise in a matching model of sellers and buyers. Sellers have a limited supply of tickets and are heterogeneous in their willingness to sell on a platform. The platform collects a royalty fee from every transaction but can impose a cap on the transaction price. We show that a stringent price cap may drive those sellers who would otherwise charge a high price out of the market, thereby reducing the competition on the seller side. As a result, the average transaction price may turn out to be higher than that in a market with no price restriction. We discuss the relevant managerial and policy implications.

February 19, 2024 | Permalink | Comments (0)

Sunday, February 18, 2024

AI and Antitrust Webinar - Wednesday, March 6 — 9-10am PT / Noon–1pm ET

At USC Gould School of Law, we have a great upcoming webinar on antitrust and AI with Sheila R. Adams James (Davis Polk & Wardwell LLP), Jamillia Ferris (Freshfields Bruckhaus Deringer) and Dokyun Lee (Questrom School of Business, Boston University) Wednesday, March 6 — 9-10am PT / Noon–1pm ET. 

Register here.

February 18, 2024 | Permalink | Comments (0)

Saturday, February 17, 2024

24th Annual Loyola Antitrust Colloquium

April 26, 2024

Institute for Consumer Antitrust Studies
Loyola University Chicago School of Law

8:45 AM

Continental Breakfast and Registration

Loyola University Chicago School of Law
Power Rogers & Smith Ceremonial Courtroom, 10th Floor
25 E. Pearson Street, Chicago, IL 60611

9:10 AM

Welcome

Spencer Weber Waller
Professor and Director, Institute for Consumer Antitrust Studies
Loyola University Chicago School of Law

9:15 AM

Darren Bush, University of Houston College of Law
Peter Carstensen, Wisconsin Law School

Breaking Up Bottlenecks in Bog Tech and Everywhere Else: Two Remedies that Keep Your Packages Arriving in Two Days

Commentators:
Jay Himes, New York Bar
John Newman, University of Miami School of Law

10:30 AM

Coffee Break

10:45 AM

Theodosia Stavroulaki, Gonzaga University School of Law

The Healing Power of Antitrust

Commentators:
Jordan Paradise, Loyola University Chicago School of Law
Gwendolyn J. Cooley, Wisconsin Assistant Attorney General for Antitrust

12:00 PM

Lunch
Faculty Lounge, 13th Floor

12:30 PM

Lunch Address

FTC Commissioner Alvaro Bedoya

Reinvigorating Labor Market Considerations in Merger Review

1:30 PM

Marek Martyniszyn, Queen’s University Belfast

Antitrust in Times of Crisis

Commentators:
Russel Damtoft, Federal Trade Commission
Andre Fiebig, Quarles & Brady

2:45 PM

Ice Cream Sundae Break

3:15 PM

John Kwoka, Northeastern University

Unscrambling the Eggs: Breaking Up Consummated Mergers

Commentators:
Marina Lao, Seton Hall Law School
Jennifer Sturiale, Delaware Law School, Widener University

6:30 PM

Colloquium Dinner

Osteria Via Stato
620 N State St, Chicago, IL 60654

February 17, 2024 | Permalink | Comments (0)

Friday, February 16, 2024

Strategic Responses to Algorithmic Recommendations: Evidence from Hotel Pricing

Strategic Responses to Algorithmic Recommendations: Evidence from Hotel Pricing

 

Daniel Garcia

University of Vienna

Juha Tolvanen

University of Rome Tor Vergata - Department of Economics and Finance

Alexander K. Wagner

University of Salzburg - Department of Economics and Social Sciences; University of Vienna - Vienna Center for Experimental Economics

Abstract

We study the interaction between algorithmic advice and human decisions using high-resolution hotel-room pricing data. We document that price setting frictions, arising from adjustment costs of human decision makers, induce a conflict of interest with the algorithmic advisor. A model of advice with costly price adjustments shows that, in equilibrium, algorithmic price recommendations are strategically biased and lead to suboptimal pricing by human decision makers. We quantify the losses from the strategic bias in recommendations using as structural model and estimate the potential benefits that would result from a shift to fully automated algorithmic pricing.

February 16, 2024 | Permalink | Comments (0)

Thursday, February 15, 2024

Search Engine Competition

Search Engine Competition

 

Daniel Garcia

University of Vienna

Abstract

This paper studies a model of search engine competition with endogenous obfuscation. Platforms may differ in the quality of their search algorithms. I study the impact of this heterogeneity in consumer surplus, seller profits and platform revenue. I show that the dominant platform will typically induce higher prices but that consumers may benefit from asymmetries. I also show that enabling sellers to price-discriminate across platforms is pro-competitive. I then embed the static model in a dynamic setup, whereby past market shares lead to a better search algorithm. The dynamic consideration is pro-competitive but initial asymmetries are persistent.

February 15, 2024 | Permalink | Comments (0)

Wednesday, February 14, 2024

Airbnb, Hotels, and Localized Competition

Airbnb, Hotels, and Localized Competition

 

Maximilian Schaefer

Institut Mines-Télécom Business School

Kevin Ducbao Tran

University of Bristol, School of Economics

 

Abstract

We analyze competition between hotels and Airbnb listings as well as the effect of Airbnb on consumer welfare, hotel profits, and Airbnb host surplus. For this purpose, we use granular daily-level data from Paris for the year 2017. We estimate a random coefficient logit model of demand. We extend prior research by accounting for the localized nature of competition within districts of the city. Our results suggest that demand is segmented by district as well as accommodation type. Based on these demand estimates, we estimate separate supply-side models for hotels and Airbnb, to account for differences in price setting we observe in the data. Using the estimated models, we assess how Airbnb affects hotel profits and consumer welfare and how much Airbnb hosts value the platform. Our simulations imply that Airbnb increases average consumer surplus and decreases hotel profits substantially. Airbnb hosts seem to value the platform moderately.

February 14, 2024 | Permalink | Comments (0)

Tuesday, February 13, 2024

The 2023 Draft Merger Guidelines: A Review

The 2023 Draft Merger Guidelines: A Review

 

Herbert Hovenkamp

University of Pennsylvania Carey Law School; University of Pennsylvania - The Wharton School

Abstract

The 2023 draft Merger Guidelines shift the focus of enforcement away from price results and toward increasing concentration. While they seek to use “simple and straightforward” language to reach a broad audience, they are not sufficiently sensitive to that audience’s principal concern, which is high prices. The current draft relies heavily on Supreme Court case law from the 1960s and 1970s at the expense of more recent cases in the Circuit Courts of Appeal relating merger law to antirust’s general concern about higher prices and the exercise of market power. In some cases, the draft Guidelines may even disapprove mergers that reduce prices, in conflict with Supreme Court precedent.

In other ways, the draft Guidelines usefully expand enforcement, particularly against horizontal mergers further facilitating interfirm coordination or harmful unilateral effects. The Guidelines would have a greater chance of managing their way through the federal courts if they focused on this core, where the 2010 Guidelines were underdeterrent. An abundance of economic data indicates that the basic law of horizontal mergers is underenforced, and is not offering sufficient protection against merger-induced price increases. That message must be brought home to the federal judges seeking to line up these Guidelines with the statutory language and case law.

The draft’s increased focus on supply markets, particularly labor, is well justified, but it does not adequately link the health of product markets to that of labor markets. Labor is mainly a variable cost, highly and quickly responsive to changes in product output. So a wage-enhancing policy for labor is well facilitated by a policy advocating high output and low prices for buyers.

In several collateral areas the draft Guidelines widely voice new concerns that have not been well developed in previous Guidelines. In others, however, they exhume obsolete doctrines that are difficult to defend, particularly if their application is not related to the attainment of higher output and lower prices.

February 13, 2024 | Permalink | Comments (0)

Monday, February 12, 2024

International Review of Law and Economics - Digital markets and competition

Call for papers

6 February 2024

Digital markets and competition

With the growth of digital markets, businesses are confronted with new challenges related to competition and market access. This holds true for all enterprises, but it is especially pertinent for small and medium-sized enterprises (SMEs), which play a vital role in driving innovation, job creation, and economic growth.

This special issue focuses on exploring the intersection of competition, digital markets, and antitrust policies. We invite original research papers that address theoretical, empirical, and policy-oriented questions related to this important topic.

Guest editors:

• Prof Emanuela Carbonara, Department of Sociology and Business Law, University of Bologna, [email protected]

• Prof Wenming Xu, School of Law and Economics, China University of Political Science and Law, [email protected] 

• Prof Giuseppina Gianfreda, Department of Humanities, Communication and Tourism, University of Tuscia, Viterbo, [email protected]

Special issue information:

Topics of interest include, but are not limited to:

• The impact of digital markets on firms' access to and participation in markets. The digital transformation has substantial impact and poses challenges to firms, in particular to SMEs, that face special barriers to entry in digital markets. Policy makers and antitrust authorities need to implement policies to ensure that SMEs can participate fully in the digital economy. What has been done so far? What can be done going forward?

• The role of competition policy and regulation in promoting competition in digital markets and in protecting SMEs and innovative startups. Digital markets are characterized by network economies and large market players; they allow new or enhanced anticompetitive practices, thus requiring a new approach in competition policy.

• The effects of mergers and acquisitions on competition and innovation in digital markets, particularly for SMEs and innovative startups. Digital markets are typically characterized by asymmetric firms, with different bargaining power. Competition policies might have unexpected effects and require more restrictive merger control.

• The impact of platform market power on market entry and business growth. Digital markets are most often populated by two sided markets, which affects competition. We have already some evidence on the market for entertainment. Markets for new goods and services are emerging at unexpected speed. Will they follow the same path? Will they require special provisions and controls?

• The role of data and algorithms in shaping competition and market outcomes. This topic includes the analysis of the effects of artificial intelligence and algorithms in market management and price formation, the issues of data protection, and the market power granted by data.

• The effects of international trade and globalization on competition and market access in digital markets. International trade and globalization have transformed the world economy, creating new opportunities for SMEs and highly innovative firms to participate in digital markets. Digital markets and the internet increased international trade. They are changing the way goods and services are produced, distributed, and consumed across borders. However, this has also created challenges for SMEs to compete and access markets.

• The role of intellectual property rights in promoting innovation and competition in digital markets. Intellectual property rights (IPRs) play a crucial role in promoting innovation and competition in digital markets, which may have limited resources to compete in markets dominated by large incumbents. IPRs, however, may constitute a problem when they allow the creation of patent trolls. This can be severely burdensome in particular for SMEs, which may lack the resources to defend against patent infringement lawsuits. To address these concerns, there have been various proposals for reforming IPRs in digital markets. For example, some have suggested that patent offices should be more rigorous in granting patents, particularly in areas such as software, and that patent trolls should be discouraged through legal reforms or sanctions.

We welcome submissions from economists, lawyers, and other scholars working in related fields. All submissions will be subject to peer review. Manuscripts should be submitted online through the International Review of Law and Economics website and must conform to the journal's submission guidelines.

Manuscript submission information:

The Journal’s submission system is open for submissions to our Special Issue. When submitting your manuscript please select the article type “VSI:Digital markets and competition”. Please submit your manuscript before May 31, 2024.

The submission link is: https://www.editorialmanager.com/irle/default.aspx

All submissions deemed suitable to be sent for peer review will be reviewed by at least two independent reviewers. Once your manuscript is accepted, it will go into production, and will be simultaneously published in the current regular issue and pulled into the online Special Issue. Articles from this Special Issue will appear in different regular issues of the journal, though they will be clearly marked and branded as Special Issue articles.

Please see an example here: 

https://www.sciencedirect.com/journal/international-review-of-law-and-economics 

Please ensure you read the Guide for Authors before writing your manuscript. The Guide for Authors and link to submit your manuscript is available on the Journal’s homepage at: 

https://www.sciencedirect.com/journal/international-review-of-law-and-economics/publish/guide-for-authors

Inquiries, including questions about appropriate topics, may be sent electronically to Guest editors.

February 12, 2024 | Permalink | Comments (0)

Baseball’s Anticompetitive Antitrust Exemption

Baseball’s Anticompetitive Antitrust Exemption

 

Marc Edelman

City University of New York - Baruch College, Zicklin School of Business; Fordham University School of Law

John T. Holden

Oklahoma State University

Abstract

For more than one hundred years, professional baseball has enjoyed a form of exemption from federal antitrust laws. Arising from a statement made by the game’s first commissioner Kenesaw Mountain Landis that organized baseball is a national institution and not labor, and later enshrined into common law by Justice Oliver Wendell Holmes’s adoption of a now-outdated definition of interstate commerce, baseball’s antitrust exemption is “an exception, an anomaly and an aberration” that has been with us for more than a century.

Relying on an exemption from antitrust law, owners of Major League Baseball have become exceedingly wealthy based on their carte blanche freedom to act in their collective best interests—sometimes to the detriment of players, rival sports leagues, and fans. Even though the original basis for baseball’s antitrust exemption has long since faded, courts and Congress, fearing political backlash, or perhaps enjoying the perks of aggressive lobbyists seeking to curry favor, have been loath to lift the exemption.

This Article calls for reform to the treatment of professional baseball under federal antitrust laws and suggests that baseball, like all other organized sports, be held subject to competitive scrutiny. Drawing on a careful study of baseball history, legal precedent and public policy, the article concludes that even if organized baseball is a national institution, much like its historic use of amateur players, unbalanced schedules and segregated leagues, the time has come to put baseball’s historic antitrust exemption behind us.

February 12, 2024 | Permalink | Comments (0)

Friday, February 9, 2024

What Is Algorithmic Bias and Why Antitrust Agencies Should Care

What Is Algorithmic Bias and Why Antitrust Agencies Should Care

 

Giovanna Massarotto

Center for Technology Innovation and Competition (CTIC), University of Pennsylvania; UCL Centre for Blockchain Technologies (UCL CBT)

Abstract

Before asking whether algorithmic bias is a competition concern, we might need to understand what bias is and how it is exhibited in algorithms. Bias in people is well known and likely inevitable, raising the question of what we can do if algorithms learn to be bias. Artificial intelligence (“AI”) algorithms are those that can raise issues of bias as they learn from past data, and we might have to deal with historical bias situations or unrepresentative or insufficient data. AI algorithms are built by software developers, who can also be biased. Companies are increasingly using AI algorithms to compete more effectively. It is fundamental that antitrust agencies tackle anticompetitive practices performed by means of algorithms, which might imply algorithmic bias. Bias is a broad term and exclusive practices are likely to increase bias in consumers. Therefore, antitrust agencies can be critical in addressing issues related to algorithmic bias. However, a more important question remains unresolved if we cannot explain why and how an AI algorithm is biased in the first place.

February 9, 2024 | Permalink | Comments (0)