Conspiratorial algorithms! Whatever next?

As a growing number of algorithms take over more tasks in companies of all kinds, we are starting to see some interesting consequences that will require attention.

Typically, price fixing, agreements between supposed competitors to buy or sell a product, service, or raw material, or to maintain market conditions so that the price is kept at a certain level by controlling supply and demand, is considered anti-competitive, requiring the regulator to intervene and sanction the actors involved.

Price fixing is usually about trying to increase the price of a product to its maximum, which usually generates profits for sellers, but it can also be an attempt to discount or stabilize prices.

But what happens when the actors involved are algorithms?

We’re seeing this in more and more markets: AI assistants are being used by salespeople to fix prices. In the case of the real estate market, for example, platforms such as RealPage or Yardi pressure sellers to set prices and maximize their profits through rules based on market behavior, which leads to a systematic increase in prices to the detriment of buyers. The behavior is openly collusive and has prompted complaints, but rather than being intentional, it comes from the use of maximization algorithms from a position, that of a platform, which can coordinate…