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Competition watchdog eyes e-collusion among online sellers

Competition watchdog eyes e-collusion among online sellers

ACCC chairman reveals new Data Analytics Unit

ACCC chairperson Rod Sims

ACCC chairperson Rod Sims

Australia’s competition watchdog is set to crack down on potential “e-collusion” among online retailers and other businesses thanks to work being done by its new Data Analytics Unit.

The Australian Competition and Consumer Commission (ACCC) chairman, Rod Sims, explained at an event in Sydney on 16 November how the establishment of the Data Analytics Unit is expected to help protect buyers from incidents of e-collusion made possible by the rise of big data.

Specifically, the new unit is being used to support the work of the ACCC’s investigations teams and economists by analysing algorithms and artificial intelligence technology used by online sellers and other businesses for pricing purposes.

“Concern has been raised by some that the way prices are determined, and potentially collusive outcomes are achieved, is changed by machine learning algorithms,” Sims said in his presentation at the Sydney event.

“It is argued that, in the right market conditions, pricing algorithms may be used to more effectively engage in and sustain collusion, whether ‘tacit’ or not, reducing competition but without contravening competition laws.

“It is said that a profit maximising algorithm will work out the oligopolistic pricing game and, being logical and less prone to flights of fancy, stick to it,” he said.

At present, according to Sims, the ACCC is considering cases where algorithms are deployed as a tool to facilitate conduct which may contravene Australian competition law.

In response, the new Data Analytics Unit has already been deployed in a number of market studies the agency has undertaken.

“To further complicate matters, the development of deep learning and artificial intelligence may mean that companies will not necessarily know how, or why, a machine came to a particular conclusion,” Sims said.

“To this end, it is argued that if similar algorithms are deployed by competing companies, an anti-competitive equilibrium may be achieved without contravening competition laws,” he said.

“In Australia, we take the view that you cannot avoid liability by saying ‘my robot did it’.”


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Tags governmentbig datae-commerceacccartificial intelligenceAustralian Competition and Consumer CommissionRod Sims

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