Antitrust Injury and Damages in Algorithmic Collusion Cases: Another “New Frontier”?

ABA Antitrust Source

02.28.2025

In 2011, two sellers of an esoteric textbook about flies each set their prices by using computer code to collect the other’s publicly posted price and multiply it by a specific number. This early example of “algorithmic pricing”—the practice of firms setting prices based on analyses per- formed by computer programs—led to the infamous price tag of $23,698,655.93 for the book “The Making of a Fly.”¹

About a decade ago, “algorithmic collusion”—the idea of reaching an anticompetitive agreement through algorithmic pricing—entered the collective consciousness of antitrust and competition practitioners when the Department of Justice (DOJ) filed a lawsuit accusing online framed art sellers of using algorithm-based software to fix prices.² As the DOJ stated, it “will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using com-plex pricing algorithms.”³

Today, firms in many industries—such as “advertising, e-commerce, entertainment, insurance, sports, travel, and utilities”⁴—rely on computer algorithms in one way or another when determining what prices to charge.⁵ As these practices have proliferated, the focus on how they may affect competition has intensified. In November 2023, the DOJ labeled algorithms “the new frontier” as a medium for facilitating firms’ collusive behavior.⁶ In the last several years, an increasing number of lawsuits alleging violation of antitrust laws through “algorithmic collusion” have been filed both by the DOJ and private plaintiffs.⁷

Read the remainder of the piece here.

CITATIONS

[1] See Olivia Solon, How a Book about Flies Came to Be Priced $24 Million on Amazon, Wired (Apr. 27, 2011, 3:35 PM), https://www.wired.com/2011/04/amazon-flies-24-million/; see also Michael Eisen, Amazon’s $23,698,655.93 book about flies, it is not junk (Apr. 22, 2011), https://www.michaeleisen.org/blog/?p=358.

[2] Plea Agreement, United States v. Topkins, No. 3:15-cr-000201-WHO (N.D. Cal. Apr. 30, 2015).

[3] Press Release, Office of Pub. Affairs, U.S. Dep’t of Justice, Former E-Commerce Executive Charged with Price Fixing in the Antitrust Division’s First Online Marketplace Prosecution (Apr. 6, 2015), https://www.justice.gov/opa/pr/former-e-commerce-executive-charged-price-fixing-antitrust-divisions-first-online-marketplace.

[4] See Marco Bertini & Oded Koenigsberg, The Pitfalls of Pricing Algorithms, Harvard Bus. rev., Sept. 1, 2021, https://hbr.org/2021/09/the-pitfalls-of-pricing-algorithms.

[5] See Zach Brown & Alexander MacKay, Are Online Prices Higher because of Pricing Algorithms?, Brookings, July 7, 2022, https://www.brookings.edu/articles/are-online-prices-higher-because-of-pricing-algorithms/.

[6] See Statement of Interest of the United States at 2, In re RealPage Rental Software Antitrust Litig., No. 3:23-md-3071 (M.D. Tenn. Nov. 15, (ECF No. 627), https://www.justice.gov/d9/2023-11/418053.pdf.

[7] The current state of algorithmic collusion litigation is discussed in the next section.