• Algorithms, Artificial Intelligence, and Joint Conduct
  • June 7, 2017 | Authors: Dylan I. Ballard; Amar S. Naik
  • Law Firm: Sheppard, Mullin, Richter & Hampton LLP - San Francisco Office
  • The ability of algorithms and artificial intelligence to monitor and set prices is increasing in sophistication, effectiveness and independence from human involvement at an exponential rate. The growth in this area, which is seen simultaneously across a range of AI applications, is such that no one — even its creators — is likely to fully appreciate AI’s capabilities until sometime after they have been realized. Pricing “bots” are already capable of engaging in behavior that we would not hesitate to call “parallel conduct” if it were performed by humans, and they will only get better at it. Indeed, the day may not be so far off when the pricing bot of one firm is fully capable of colluding - in every meaningful sense - with the pricing bot of a competing firm. At that point, we may have “conspiracy” cases under Section 1 of the Sherman Act that look very much like the cases we have today, except that the parts now played by humans are played by robots.2