The rising role of pricing algorithms: positive and negative effects in the framework of EU Competition Law

Abstract: Pricing algorithms are gaining a wide application in the market and in this regard are the cause of various challenges in terms of competition law. This work is aimed at studying pricing algorithms, and their positive and negative effects on competition in the market, as well as identifying possible solutions under EU law for current and future challenges with the increasing role of algorithms. To achieve the goals of this paper, the concepts of algorithms, including pricing algorithms, are discussed. Relying on a conceptual, economic and legal approach, the positive and negative effects of pricing algorithms on competition are studied separately which allows for a deeper analysis of the problems and benefits of using pricing algorithms in the market. An important part of the definition and problem setting is examined from a legal point of view relying on EU legislation, namely Articles 101 and 102, as well as the EU case law, which reflects the issues of possible regulation of the use of pricing algorithms to ensure healthy competition. Due to the complexity of the regulation, a special place is given to unilateral and coordinated effects of competition harm risks from both economic and legal points of view, which allow discussing certain ways for possible coverage within EU legislation. As a result of these studies, the relationship between the positive and negative effects is established and solutions to problems are identified that can cover the use of pricing algorithms in the framework of competition law. The ability to apply EU competition law to the use of pricing algorithms is currently limited, as EU competition legislation is not sufficient to address some of the harm risks studied. However, this work also provides alternative solutions for the possible regulation of the use of algorithms. Along with the opinions of various legal scholars and practitioners, there are future challenges that are imminently approaching the market with the increasing use of pricing algorithms.