algorithmic cartels


In light of the reality that pricing algorithms allow commercial actors to perform all phases of their price-fixing conspiracies without leaving behind trails of traditional incriminating evidence, the scarcity of algorithmic cartels prosecutions is hardly surprising. Given well-documented evidence that the authorities struggle in their efforts to detect even conventional price-fixing cartels, it is imperative to come up with new tools for detecting algorithmic cartels, which have unprecedented potential to harm consumers if left ignored. This Note investigates algorithmic capabilities to collude, as well as legal and technical challenges that governmental authorities face in confronting such collusion. This Note then introduces two proposals to improve the detection of algorithmic cartels: cartel screening and a whistleblower bounty program. The Note argues that, although the optimal solution is to implement the whistleblower bounty program and cartel screening together, it would be more effective and efficient to launch the former before the latter. Importantly, by implementing the whistleblower bounty program before cartel screening, governmental authorities would gain the expertise necessary to enforce antitrust laws without impeding innovation.