AI has the potential to simplify numerous business processes, including price fixing.
With the popular new technology, the Department of Justice is now taking strong action against anticompetitive applications of it.
Therefore, whether they are carried out by people or algorithms, illegal activities include pricing over market rates, forming alliances with competitors, and making exclusive deals.
For at least the last five years, the Justice Department has been worried about how AI may affect antitrust cases.
For example, it has been looking into RealPage, a provider of rental property management software, since 2022 for employing AI algorithms to set prices above market rates.
According to the Justice Department, the business anticipated that its rivals would follow suit when it exploited private and sensitive data in an algorithm. It states that the same standards should be applied to that practice as they are to humans. In a 2023 statement, the agency stated, “Automating an anticompetitive scheme does not make it less anticompetitive.”
The Biden Administration has initiated numerous investigations and antitrust cases against big tech corporations including as Google, Apple, Amazon, and Microsoft, and its focus on anticompetitive applications of AI is part of this larger effort.
Since algorithms can process more data than people, they will probably be much more relevant to litigation in the long run.
Assistant Attorney General Jonathan Kanter said, in relation to the RealPage investigation, “If your AI fixes prices, you’re just as responsible.” In fact, we should be more concerned about the employment of AI and algorithmic-based technologies than with the swapping of manila envelopes in a smoke-filled room, as pricing-fixing is far easier when it’s outsourced to an algorithm.
That implies that there may soon be tighter laws governing the usage of AI as well as harsher consequences for abusing it.
Deputy Attorney General Lisa Monaco stated that the Justice Department’s emphasis on AI means prosecutors will impose “stiffer sentences” on individuals and corporations that misuse AI for white-collar crime at the American Bar Association’s annual gathering on white-collar crime this March, as reported by the Associated Press.
Compliance officials, who make sure businesses follow the law, should also “take note,” the speaker stated. As they do in all corporate resolutions, our prosecutors evaluate a company’s compliance program based on how well it reduces the company’s biggest risks. And it now includes the risk of misusing AI for an increasing number of businesses.”
