Competition law and algorithms: the Luxembourg Competition Council exempts a booking platform in the taxi sector

By Annabelle Lepi

Algorithms is the hot topic in competition law. In June 2017, the OECD published a paper on the risk of collusion in the use of algorithms. This issue has been regularly addressed by Commissioner Vestager in her speeches.

If algorithms can improve pricing models, customize services, predict market trends and thus generate efficiencies, competition authorities fear that the widespread use of algorithms could potentially produce anti-competitive effects by making it easier for undertakings to achieve and sustain collusion without any formal agreement or human interaction. For instance, the European Commission’s inquiry last year into e-commerce found that two-thirds of retailers use algorithms to track their competitors’ prices. Nevertheless, competition authorities’ decisions on that issue have been rare until now, which creates legal uncertainty for innovative undertakings.

The Luxembourg Competition Council has, however, opened new doors with a pragmatic decision regarding a booking platform for setting taxi fares.