Strange as it sounds, maybe we’re getting closer to the day we have to seriously consider liability for computer conspiracies.
On April 6, David Topkins, a former executive of an e-commerce seller of posters, prints and framed art agreed to plead guilty for conspiring to fix the prices of posters sold online. Given the ongoing DOJ investigation, details are sketchy, but according to the DOJ press release,
Topkins and his co-conspirators agreed to fix the prices of certain posters sold in the United States through Amazon Marketplace. To implement their agreements, the defendant and his co-conspirators adopted specific pricing algorithms for the sale of certain posters with the goal of coordinating changes to their respective prices and wrote computer code that instructed algorithm-based software to set prices in conformity with this agreement.
Apparently the computers weren’t completely in control — but what if they are? According to a recent paper, that time may be coming:
The development of self-learning and independent computers has long captured our imagination. The HAL 9000 computer, in the 1968 film, 2001: A Space Odyssey, for example, assured, “I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do.” Machine learning raises many challenging legal and ethical questions as to the relationship between man and machine, humans’ control — or lack of it — over machines, and accountability for machine activities.
While these issues have long captivated our interest, few would envision the day when these developments (and the legal and ethical challenges raised by them) would become an antitrust issue. Sophisticated computers are central to the competitiveness of present and future markets. With the accelerating development of AI, they are set to change the competitive landscape and the nature of competitive restraints. As pricing mechanisms shift to computer pricing algorithms, so too will the types of collusion. We are shifting from the world where executives expressly collude in smoke-filled hotel rooms to a world where pricing algorithms continually monitor and adjust to each other’s prices and market data.
Our paper addresses these developments and considers the application of competition law to an advanced ‘computerised trade environment.’ After discussing the way in which computerised technology is changing the competitive landscape, we explore four scenarios where AI can foster anticompetitive collusion and the legal and ethical challenges each scenario raises.
Ariel Ezrachi & Maurice E. Stucke, AI & Collusion (Apr. 8, 2015).