Algorithms and Big Data: An antitrust perspective

By Karan Chandhiok and Lagna Panda, Chandhiok & Mahajan
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There has been a growing interest among antitrust authorities across the globe on how companies with market power collect and process data. Use of algorithms, machine learning and otherwise, and Big Data are being studied keenly by antitrust authorities, particularly on the issues of likelihood of collusion and “personalized pricing”.

Karan ChandhiokPartnerChandhiok & Mahajan
Karan Chandhiok
Partner
Chandhiok & Mahajan

The UK government recently initiated an open consultation under the Digital Competition Expert Panel to gather evidence on “the state of competition in the digital economy”. The French and German antitrust authorities have also launched a joint project to examine the impact of use of algorithms on competition.

Pricing effect: Much of the interest of competition law authorities in Big Data and algorithms stems from the fear and anticipation that big companies have the capability to employ sophisticated algorithms to process data and bring about personalized pricing. That’s not to say that companies do not already engage in differential pricing. Third-degree price discrimination, i.e. charging different prices to different consumer groups based on factors like demography, is a standard business practice in various industries in India — airlines offer discounts to senior citizens and laptop manufacturers offer discounts to students. The question, therefore, is whether differential pricing, in particular, personalized pricing, can and should be a competition law concern. In India, this question has particularly come up in the context of e-commerce marketplaces.

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Karan Chandhiok is a partner and Lagna Panda is a senior associate at Chandhiok & Mahajan.

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