Everyone knows that price fixing is against the law, chiefly Section 1 of the Sherman Act.
Competitors may not collude, i.e., agree, to keep prices where they want them, but there are relatively new pricing platforms that some companies maintain take them out of the equation, so they do not have to share private information directly with competitors. Instead, they claim, they feed their data to a third-party which uses algorithms to come up with pricing for these competitors based on data they all contribute. The subject has been getting a lot of attention as cases mount against a company called RealPage, a firm that provides shared pricing services for landlords. The company faces dozens of suits in multidistrict litigation and has also captured the attention of federal antitrust law enforcers. But they are not the only company finding themselves in litigation.
As our guest recently wrote: “When pricing algorithms are used by individual firms, such as airlines, e-commerce platforms, ride-share and room-share companies, stock traders, and others, there are unlikely to be anti-competitive consequences. It is when market competitors avail themselves of the same algorithmic program or service that the specter of unlawful collusion arises.” That risk increases as markets become more concentrated, he says.
He is Jonathan Rubin, Partner and Co-Founder of MoginRubin LLP, a widely recognized competition law attorney, economist, and commentator who has presented at antitrust conferences in the United States and Europe, testified before several congressional committees, and before the Directorate General for Competition of the European Commission.
“The fact that these services employ an algorithm is not central to what's going on in this scenario,” he told me, “because what's important is the conduct of the businesspeople involved.”
Listen to my interview with Jonathan Rubin as we discuss what algorithmic or software-facilitated pricing is, what the law says about price collusion, how this new pricing mechanism violates that law, and recent developments in litigation. *******This podcast is the audio companion to the . The is a collaborative project between and the legal research family, which includes , , and Docket Alarm.If you have comments, ideas, or wish to participate, please drop me a note at Tom HagyLitigation Enthusiast andHost of the Emerging Litigation PodcastSubscribe on your favorite platform.
