AI explained AI and antitrust

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AI offers new tools to help competition enforcers detect market-distorting behavior that was impossible to see until now. Paris Managing Partner Natasha Tardif (https://www.reedsmith.com/en/professi...) explains how AI tools are beginning to help prevent anticompetitive behaviors, such as collusion among competitors, abuse of dominance and merger control. • • ---more--- • • Transcript: • • Intro: Hello and welcome to Tech Law Talks, a podcast brought to you by Reed Smith's Emerging Technologies Group. In each episode of this podcast, we will discuss cutting-edge issues on technology, data, and the law. We will provide practical observations on a wide variety of technology and data topics to give you quick and actionable tips to address the issues you are dealing with every day. • • Natasha: Welcome to our new series on AI. Over the coming months, we'll explore the key challenges and opportunities within the rapidly evolving AI landscape. Today, our focus is going to be on AI and antitrust. AI is at the core of antitrust authorities' efforts and strategic thinking currently. It brings a number of very interesting challenges and great opportunities, really. In what ways? Well, let's have a look at how AI is envisaged from the perspective of each type of competition concept. I.e. anti-competitive agreements, abuse of dominant position, and merger control. Well, first of all, in relation to anti-competitive agreements. Several types of anti-competitive practices, such as collusion amongst competitors to align on market behavior or on prices, have been assessed by competition authorities. And when you look at those in relation to algorithms and AI, it's a very interesting area to focus on because a number of questions have been raised and some of them have answers, some others still don't have answers. The French competition authorities and the German Bundeskanzleramt issued a report sharing their thoughts in this regard in 2019. The French competition authority went as far as creating a specific department focusing on digital economy questions. At least, three different behaviors have been envisaged from an algorithm perspective. First of all, algorithms being used as a supporting tool of an anti-competitive agreement between market players. So the market players would use that technology to coordinate their behavior. This one is pretty easy to apprehend from a competition perspective because it is clearly a way of implementing an anti-competitive and illegal agreement. Another way of looking at algorithms and AI in the antitrust sector and specifically in relation to anti-competitive agreements is when one and the same algorithm is being sold to several market players by the same supplier, creating therefore involuntary parallel behaviors or enhanced transparency on the market. We all know how much the competition authorities hate enhanced transparency on the market, right? And a third way of looking at it would be several competing algorithms talking, quote-unquote, to each other and creating involuntary common decision-making on the market. Well, the latter two categories are more difficult to assess from a competition perspective because, obviously, we lack one essential element of an anti-competitive agreement, which is, well, the agreement. We lack the voluntary element of the qualification of an anti-competitive agreement. In a way, this could be said to be the perfect crime, really, as collusion is made without a formal agreement having been made between the competitors. Now, let's look at the way AI impacts competition law from an abuse of dominance perspective. In March 2024, the French Competition Authority issued its full decision against Google in the Publishers' Related Rights case, whereby it fined again Google for €250 million for failing to comply with some of its commitments that had been made binding by its decision of 21 June 2022. The FCA considered that Bard, the artificial intelligence service launched by Google in July 2023, raises several issues. One, it says that Google should have informed editors and press agencies of the use of their contents by its service Bard in application of the obligation of transparency, which it had committed to in the previous French Competition Authority decision. The FCA also considers that Google breached another commitment by linking the use of press agencies and publishers' content by its artificial intelligence service to the display of protected content and services such as search, discover, and use. Now, what is this telling us about how the competition authorities look at abuse of dominance from an AI perspective? Well, interestingly, what it's telling us is something it's been telling us for a while when it comes to abuse of dominance, and particularly in the digital world. These behaviors have even been so much at the core of the competition authorities', concerns that they've become part of the new digital markets app. And ...

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