Amy Klobuchar Wants to Stop Algorithms From Ripping You Off.
'This week I interviewed Senator Amy Klobuchar, Democrat of Minnesota, about her Preventing Algorithmic Collusion Act. If you don’t know what algorithmic collusion is, it’s time to get educated, because you could be its next victim.
Algorithmic collusion is where companies illegally coordinate to raise prices through the use of an algorithm that they supply their data to. There is no explicit or even wink-and-a-nod agreement among the competitors, the usual standard for collusion. Instead, each company has its own contract with the algorithm provider. That provider uses the companies’ data to make pricing recommendations that make them all richer — at the expense of their customers.
Algorithmic collusion made the headlines this month when Vice President Kamala Harris vowed to crack down, should she be elected, on “corporate landlords” that use price-setting software to jack up rents. Last week, the Justice Department sued RealPage, charging that the company, which uses an algorithm powered by artificial intelligence to help landlords set rental rates, referred to its products as “driving every possible opportunity to increase price.”
Klobuchar introduced her bill in February. She told me she worries that “you can see this going economywide,” extending into more and more businesses. Last year, for example, the Justice Department sued Agri Stats for, it claimed, organizing and managing anticompetitive information exchanges among processors of broiler chicken, pork and turkey. This year, The Times found that MultiPlan, a data analytics firm, was working with big health insurers to lower reimbursement for out-of-network spending.
Such cases could be just the start, Klobuchar told me. The more companies sign up for price-setting services, the easier it will be for participants to raise prices because there won’t be anyone left to undercut them. “It’s mind-blowing what could go wrong here unless something is done about algorithm price-fixing,” she said. . .
“We can’t not act,” Klobuchar said.
https://www.nytimes.com/2024/08/30/opinion/algorithm-collusion-amy-klobuchar.html