How AI Can Raise Antitrust Concerns

One often overlooked area of AI risk is antitrust. Antitrust law strictly prohibits companies from collaborating on things like pricing. So what happens when multiple companies use the same AI algorithms to set their prices? That question is playing out in courtrooms across the country. A recent Greenberg Traurig memo discusses the evolving state of antitrust litigation related to AI:

“Several class action lawsuits have been filed across the country in a variety of industries—including hotels, multifamily residential rental units, student housing, mobile homes, and health care services—alleging that defendants have used some type of pricing algorithm to purportedly fix, stabilize, or raise prices for their respective products. These cases have had mixed success, with some being dismissed at the outset but others surviving dismissal and subjecting the defendants to extensive and expensive discovery on the merits, as well as the risk of class certification.”

Private plaintiffs aren’t the only ones with antitrust concerns. The memo notes that federal agencies like the Department of Justice also have their eye on AI pricing models. Companies using AI pricing algorithms should keep up with updates from federal and state regulators. Additionally, the memo recommends having a human in the loop who is responsible for the ultimate pricing decisions and documents how prices were set independently of the AI algorithm.