Price fixing by algorithm is still price fixing (ftc.gov)

Article summary

The article discusses the issue of price fixing by algorithm in the rental market, where landlords use software to set prices, potentially leading to artificially high rents. The FTC is investigating this practice, which may be considered a form of collusion. The use of algorithms to set prices is not necessarily illegal, but it can be if it results in price fixing. The investigation aims to determine whether the use of these algorithms is leading to unfair market practices.

Main themes

• price fixing
• algorithmic pricing
• rental market
• collusion
• competition
• regulation

What commenters say

• The use of algorithms to set prices can be a form of price fixing if it leads to artificially high rents and reduced competition.
• Landlords using the same algorithm to set prices may be engaging in collusion, even if they do not directly communicate with each other.
• The rental market is highly inelastic, making it difficult for new players to enter and compete on price, which can lead to price fixing.
• The use of algorithms to set prices is not necessarily illegal, but it can be if it results in price fixing and reduced competition.
• Some argue that the practice of using algorithms to set prices is similar to traditional business practices, such as surveying competitors' prices, and should not be considered price fixing.
• Others argue that the use of algorithms can lead to a form of indirect communication and collusion among landlords, which can be detrimental to consumers.
• The investigation into price fixing by algorithm is necessary to ensure fair market practices and protect consumers from artificially high rents.
• The definition of price fixing is not clear-cut, and the law may need to be clarified to address the use of algorithms in setting prices.