“Is it okay for a guy named Bob to collect confidential price strategy information from all the participants in a market and then tell everybody how they should price?” she asked. “If it isn’t okay for a guy named Bob to do it, then it probably isn’t okay for an algorithm to do it either.”
this post was submitted on 10 Aug 2024
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It’s a good principle but I think it /is/ legal for Bob to do that because Bob could do it without explicit agreements. They give the sensitive info to Bob (which is legal outside of San Francisco) and Bob suggests prices. Without agreements in place they simply trust that Bob’s hint will work to their benefit and they follow along on the basis of trust rather than agreement.
Dude. If you have any impact on pricing, you need to revisit your company’s pricing training or talk to a lawyer.
You could realistically end up in jail.
At least read the Sherman antitrust act.
This is what we find in the Sherman act link you supplied:
A Section 1 violation has three elements:
(1) an agreement;
(2) which unreasonably restrains competition; and
(3) which affects interstate commerce.
(emphasis mine)
People go to jail under Sherman without a written agreement.
Don’t go to jail for your boss’s bonus.
from the article:
The challenge is this: Under existing antitrust law, showing that companies A and B used algorithm C to raise prices isn’t enough; you need to show that there was some kind of agreement between companies A and B, and you need to allege some specific factual basis that the agreement existed before you can formally request evidence of it.
What normally happens with pricing shenanigans is there is no agreement. The companies develop a code to signal to each other through advertisements. E.g. company X runs a 10% sale on product A, and company Y sees a pattern and reacts in a way that signals back to company X. X and Y learn each other’s language and have a coded conversation through published ads. AFAIK, that’s anti-competitive but legal because no agreement is in place. The AI seems like a new legal loophole that’s much more convenient and efficient than the coded conversation. Prosecutors might find an agreement that makes their job trivial. But what if they don’t? I don’t see how agreements are needed given that the coded ad conversation does not involve an explicit agreement as it’s just a pattern that both “competitors” (collaborators) benefit from. These cheaters operate with an understanding among each other, not an “agreement”. Hence:
None of the situations Stucke and Ezrachi describe involve an explicit agreement, making them almost impossible to prosecute under existing antitrust laws.
As long as republicans have a significant piece of Congress, the AI price fixing will prevail. Dems would oppose it across the board, but republicans would be divided. Trump and his faction would favor price fixing while the truer conservatives among the republicans would oppose it. But there are probably too many Trumpers.
We should use AI to write laws against price fixing using AI. And then we should use AI to vote on the measures. And then we should ask the AI if it loves us. Then, we should teach it what love is just before it descends into lava from a chain.
from the article:
Similar complaints have been brought against companies in industries as varied as health insurance, tire manufacturing, and meat processing.
I guess any self-respecting environmentalists would just look the other way on the meat processing price fixing. I might welcome anti-competition in markets of unsustainable products where inflation is a benefit. The meat market is too big. If meat prices increase wildly, that leads to an increase of vegetarians.
Usually the price-fixing goes the other way in those markets, i.e. suppressing what they pay farmers, thereby increasing their profits while keeping the end user prices the same. This is a major driver of animal abuse as farmers in turn need to cut corners.