The Retailer Winter 2018/19
in certain circumstances, the use of pricing algorithms could risk infringing the requirement to act independently of competitors
the use of pricing algorithms is not prohibited under competition law; however there are certain key recommendations for their use
3. Limiting risk when using pricing algorithms In light of the above, it is important to understand that the use of pricing algorithms is not prohibited under competition law; however there are certain key recommendations for their use: 1. Never use a pricing algorithm to facilitate a price-fixing agreement, or with the intention of exchanging current and future prices with a competitor. Even if you don’t directly contact a competitor it still can be illegal if you both understand that this is the purpose behind using an algorithm. 2. If you use a third party to design or provide algorithm technology, ensure that they do not pass on your pricing information to a competitor and that they are aware of the requirement not to reach a collusive outcome. 3. Keep your use of pricing algorithm technology under periodic review; this is a dynamic area of law and there might be a risk of inadvertently ‘drifting’ onto the wrong side of the law. 4. When making the decision as to whether to use a pricing algorithm, ensure it is taken for pro-competitive reasons such as to increase competitiveness and improve the customer retail experience rather than as a means to charge certain customers a higher price for the product or service.
ALAN DAVIS // firstname.lastname@example.org // +44 (0) 20 7054 2718 RICHARD SNAPE // email@example.com // +44 (0) 12 1626 5756
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