Everyone knows that price fixing is against the law, chiefly Section 1 of the federal Sherman Antitrust Act of 1890.

Competitors may not collude to keep prices where they want them, but there are relatively new price-calculation tools that some companies maintain takes them out of the equation. With these tools, shared across an industry, they do not have to directly swap private information with competitors. Instead, they claim, they feed their data to a third-party, which uses algorithms to come up with prices. 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. Several other companies face litigation as well.

As our guest recently wrote: “When pricing algorithms are used by individual firms, such as airlines, e-commerce platforms, rideshare 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 is Jonathan Rubin, formerly Partner and Co-Founder of Mogin Law 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 committee hearings, 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 the law, and recent developments in litigation.

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Tom Hagy
Litigation Enthusiast and
Host of the Emerging Litigation Podcast
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FILED UNDER: Complex Litigation | Technology + AI​​
TAGS: Antitrust | Compliance | Data Analytics | Emerging Litigation & Risk | Trade Regulation