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2. UBER-like Algorithms and Price Fixing

Algorithms and Price Fixing

Technological development makes it possible for a computer algorithm to operate
price fixing schemes. Ariel Ezrachi and Maurice E. Stucke have developed four scenarios

in which algorithms can fulfil this role: messenger, hub-and-spoke, predicable agent
and digital eye. These scenarios are based on the different roles an algorithm can play
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in the formation and implementation of collusion. The messenger scenario describes
the algorithm taking the role of implementing, monitoring and policing a price fixing
agreement that has been discussed and approved by humans. In a hub-and-spoke
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scenario, a single algorithm will determine the price of firms competing in the same
market. Predictable agent exemplifies the scenario in which different algorithms of
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independent firms predict a similar price outcome based on the market conditions it can

observe. In the digital eye, the algorithm’s role is to determine, completely on its own,
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what the best way is to reach a pre-determined goal, such as profit maximization. 12

Whereas the application of contemporary competition law to monitoring
algorithms and the progress in machine learning does not yet allow for the implementation

of predictable agent and digital eye, the hub-and-spoke scenario, conceivable in practice,
is still has unsettled boundaries. Hub-and-spoke cartels “raise delicate questions
pertaining to the line between perfectly legal information sharing between trading

8 Ezrachi and Stucke (2017), p. 1782. Digital eye has also been termed autonomous machine in an earlier
version of the Ezrachi and Stucke’s work. Ezrachi and Stucke (2015), p. 7. The Secretariat of the Organization for
Economic Co-operation and Development (OECD) merely acknowledges the different roles, but uses different
names. The OECD distinguished between monitoring algorithms, parallel algorithms, signaling algorithms, and
self-learning algorithms. OECD (2017), pp. 24-32. Niccolò Colombo has still used other terms for the four different
roles: classical digital cartel, inadvertent hub-and-spoke, tacit algorithmic collusion and dystopian virtual reality.
Colombo (2018), pp. 12-14.
9 Van Uytsel (2018), p. 157.
10 Ezrachi and Stucke (2017), p. 1782.
11 Van Uytsel (2018), p. 158.
12 OECD (2017), p. 30.

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