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This is why nuance and details are key in legal matters and where the sum is greater than the parts. Where the line gets drawn is often unclear and is often a m

This is why nuance and details are key in legal matters and where the sum is greater than the parts. Where the line gets drawn is often unclear and is often a matter of “I know it when I see it”. Just individually comparing prices isn’t an issue. What does become an issue is if (at least) all of the following are met. - You use an algorithm service does automates all of this - This algorithm uses both public and private data - The algorithm is ubiquitous and widely used by almost every relevant market player - The algorithm tells all users to not negotiate and the users abide by this recommendation - All of the above has a noticeable effect on the market to the detriment of a big demographic of market participants

tsimionescu 3y ago
Per the FTC filing, many of these are not relevant for deciding if illegal price fixing has occurred. It doesn't matter how the algorithm operates. If all landlords in an area publically agree that they will set rent prices at 400xx the price of a coke can, they are only using public information, but still engaged in price fixing. It doesn't matter how many people actually use the algorithm. If you try to start a cartel to do price fixing and only succeed in convincing two of your 50 competitors to participate, you've still engaged in illegal price fixing. It doesn't matter if individual price negotiation happens or not. If a bunch of companies agree to set the same list price, but also agree that they can offer deals to their customers, they are still engaging in illegal price fixing. It doesn't matter if the scheme actually succeeds in changing the prices. If two companies meet and agree to set prices at a certain value, but then they backstabber each other and undercut the agreed price, or simply other companies in the space who were not part of the scheme have too much market power to allow prices to change, the original companies still agreed to an illegal price fixing scheme and are guilty. All of the above will probably have a massive impact on the amount of damages and so on. But they have no bearing on the verdict, as the FTC lays out at length in the filing they link from the article. And this is not speculation, it is established case law.
- chii 3y ago
  > meet and agree to set prices at a certain value so the question becomes what it means to "meet and agree". If these companies never communicated, and all came to the same conclusion of a price floor (that happens to all be the same), then how can it be price fixing? To me, price fixing require that the parties agree (explicitly, or implicitly with punishment) to _not_ lower the price regardless of the lack of sales. It is not enough to have the same price (however that price comes about is irrelevant).
  - tsimionescu 3y ago
    If they can prove they never met otherwise agreed on a price, but they just happened to take the same decision, then yes, it's not price fixing. But if they are using the same third party that is telling explicitly telling them "your price should be this", then it's quite clear that they have agreed on the same price. Doing so indirectly doesn't make it any better.
chii 3y ago
> - The algorithm tells all users to not negotiate and the users abide by this recommendation that is the only relevant part that makes it price fixing.

tsimionescu 3y ago

Per the FTC filing, many of these are not relevant for deciding if illegal price fixing has occurred. It doesn't matter how the algorithm operates. If all landlords in an area publically agree that they will set rent prices at 400xx the price of a coke can, they are only using public information, but still engaged in price fixing. It doesn't matter how many people actually use the algorithm. If you try to start a cartel to do price fixing and only succeed in convincing two of your 50 competitors to participate, you've still engaged in illegal price fixing. It doesn't matter if individual price negotiation happens or not. If a bunch of companies agree to set the same list price, but also agree that they can offer deals to their customers, they are still engaging in illegal price fixing. It doesn't matter if the scheme actually succeeds in changing the prices. If two companies meet and agree to set prices at a certain value, but then they backstabber each other and undercut the agreed price, or simply other companies in the space who were not part of the scheme have too much market power to allow prices to change, the original companies still agreed to an illegal price fixing scheme and are guilty. All of the above will probably have a massive impact on the amount of damages and so on. But they have no bearing on the verdict, as the FTC lays out at length in the filing they link from the article. And this is not speculation, it is established case law.

chii 3y ago
> meet and agree to set prices at a certain value so the question becomes what it means to "meet and agree". If these companies never communicated, and all came to the same conclusion of a price floor (that happens to all be the same), then how can it be price fixing? To me, price fixing require that the parties agree (explicitly, or implicitly with punishment) to _not_ lower the price regardless of the lack of sales. It is not enough to have the same price (however that price comes about is irrelevant).
- tsimionescu 3y ago
  If they can prove they never met otherwise agreed on a price, but they just happened to take the same decision, then yes, it's not price fixing. But if they are using the same third party that is telling explicitly telling them "your price should be this", then it's quite clear that they have agreed on the same price. Doing so indirectly doesn't make it any better.

chii 3y ago

> - The algorithm tells all users to not negotiate and the users abide by this recommendation that is the only relevant part that makes it price fixing.