UK competition authority publishes research on harm by algorithm

The UK’s Competition and Markets Authority (“CMA”) has published research suggesting misused algorithms may reduce competition in digital markets and harm consumers.

The paper, Algorithms: How they can reduce competition and harm consumers, identifies three key risks:

• algorithms excluding competitors, e.g. by preferring an e-commerce platform’s own products;
• complex pricing algorithms (assuming their use becomes widespread) enabling algorithmic collusion; and
• direct harm to consumers via personalisation that manipulates consumers’ choices without their awareness.

It discusses techniques to analyse algorithmic systems, even without access to the underlying algorithms or data, the need for appropriate auditing methods and the role of regulators.

Accompanying the paper is a call for information, closing 16 March 2021.