AI can make many things easier for companies, including price fixing.
The Department of Justice is now cracking down on such anticompetitive uses of the buzzy new technology.
That means practices like setting prices above the market rates, colluding with rivals, and striking exclusionary deals are unlawful — whether humans or algorithms are behind them.
The Justice Department has been concerned about AI’s impact on antitrust litigation for at least the past few years.
Since 2022, it has been investigating RealPage, a rental property management software company, for instance, for using AI algorithms to set prices above competitive levels.
The Justice Department says the company used sensitive and private data in an algorithm under the expectation that its competitors would do the same. That practice, it says, should be judged under the same guidelines as humans. “Automating an anticompetitive scheme does not make it less anticompetitive,” the agency said in a statement from 2023.
This focus on anticompetitive uses of AI comes amid a broader spate of investigations and antitrust lawsuits the Biden Administration has launched against major tech companies like Google, Apple, Amazon, and Microsoft.
In the long term, algorithms will likely be even more important to litigate because they can process more information than humans.
“If your AI fixes prices, you’re just as responsible,” Assistant Attorney General Jonathan Kanter told The New York Times in reference to the RealPage probe. “If anything, the use of AI or algorithmic-based technologies should concern us more because it’s much easier to price-fix when you’re outsourcing it to an algorithm versus when you’re sharing manila envelopes in a smoke-filled room.”
That means stricter regulations around the use of AI — and stricter penalties for its misuse — could be coming.
At the American Bar Association’s annual gathering on white-collar crime this March, Deputy Attorney General Lisa Monaco said the Justice Department’s focus on AI means prosecutors will impose “stiffer sentences” on individuals and corporations that misuse AI for white-collar crime, according to the Associated Press.
And compliance officers, who ensure companies adhere to legal regulations, should “take note,” she said. “When our prosecutors assess a company’s compliance program — as they do in all corporate resolutions — they consider how well the program mitigates the company’s most significant risks. And for a growing number of businesses, that now includes the risk of misusing AI.”
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