Conscious Parallelism and Price Discrimination in the Era of Algorithms: A Case of Collective Abuse of Dominance?

Abstract

One of the main concerns for competition in the era of algorithms and big data is the proliferation of oligopolies in the digital economy. However, their emergence will depend on how other characteristics of the e-commerce sector will rise in the future. This paper assumes that new forms of discrimination like personalized pricing will increase exponentially, so in the future any eventual parallel pricing scenario will perhaps, to some extent, be part of a price discrimination scheme. By modelling different hypothetical cases, this report will attempt to demonstrate that it is adequate to analyze both phenomena as one single offense, to determine whether they can fall under the prohibition of Art. 102 TFEU. Thus, while the conscious parallelism may serve to establish collective dominance, the requirement of an abuse to configure the infringement would eventually be satisfied by the discriminatory conduct, in case harm is proved. In addition, the parallel behavior should be taken as a relevant element to determine whether the discrimination is abusive.

Keywords: competition law, collective dominance, exploitative abuse, price discrimination, behavioral discrimination, personalized pricing, tacit collusion, conscious parallelism, digital economy, e-commerce, algorithms, artificial intelligence, MIPLC