Artificial Intelligence & Collusion: When Computers Inhibit Competition

Posted by Social Science Research Network

Artificial Intelligence & Collusion: When Computers Inhibit Competition Ariel Ezrachi (University of Oxford) & Maurice E. Stucke (University of Tennessee)

Abstract: One may find it hard to imagine life without the power of computers. Indeed, all areas of our livelihood are affected and have benefited from technological development and an increasingly powerful computerised environment. In line with these developments, recent years have witnessed an ever increasing reliance on big data and big analytics and investment in the development of ‘smart’, ‘self-learning’ machines. These complex machines are set to assist in decision making, prediction, planning, trade, and logistics. They are also predicted to further enhance our more immediate living environment – the way we commute, shop and communicate.

Not surprisingly, the prospect of Artificial Intelligence (AI) has long fueled human imagination. The development of self-learning and independent computers raises challenging questions as to the future of the human race and the control, or lack of it, humans would exert over machines.

Interestingly, these developments and the challenges raised by them are also relevant to the area of antitrust enforcement. Sophisticated computers are central to the competitiveness of present and future markets. With the accelerating development of AI, they are set to change the competitive landscape and the nature of competition restraints, which enforcement agencies will need to tackle.