by Lili Gioia
In February 2024, Minnesota Senator Amy Klobuchar introduced her Preventing Algorithmic Collusion Act. “Companies are sharing confidential data via algorithms just as they once did in smoke-filled rooms,” Klobuchar told the New York Times (8/30/24). Algorithmic collusion is where companies illegally coordinate to raise prices through the use of an algorithm that they supply their data to, writes Times opinion writer Peter Coy. Each company has its own contract with the algorithmic provider who uses the companies’ data to make pricing recommendations that make them all richer—at the expense of their customers. In August Vice President Kamala Harris vowed to crack down on “corporate landlords” that use price- setting software to jack up rents, should she be elected. Senator Klobuchar indicated that “you can see this going economy wide. It’s mind-blowing what could go wrong here unless something is done about algorithmic price-fixing,” she said. The 134 year old Sherman Anti-Trust Act could not foresee algorithmic collusion. University of Tennessee Knoxville College of Law professor Maurice Stucke told the Times, “As more companies outsource pricing to algorithms, algorithmic collusion will become a ‘bigger issue.’” “The invisible hand is replaced by the digital hands.” A 2023 Federal Trade Commission lawsuit alleged that Amazon.com created a secret algorithm to raise prices on products selectively based on the algorithm’s judgment of whether competitors will follow Amazon’s lead and raise their own prices. Professor Stucke said that “The algorithm learns on its own to collude. That is hard to get at under the antitrust laws.” Klobuchar’s bill doesn’t implicate all pricing algorithms—just ones that mash up confidential information from two or more competitors. The Federal Trade Commission ordered 8 companies to provide information on ‘surveillance pricing’ practices, according to a 7/23/24 ABC News report. “Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing,” FTC Chair Lina M. Khan said. Firms that harvest Americans’ personal data can put peoples’ privacy at risk. Firms could be exploiting this vast trove of personal information to charge people higher prices. Companies may offer products and services using consumer data (including credit information, location and browsing history) to charge different customers different prices for the same goods. The FTC will question third party intermediaries claiming to use advanced algorithms, artificial intelligence and other technology. “The FTC inquiry will shed light on this shadowy eco-system of pricing middlemen,” Khan said. Federal Trade Commission orders were sent to Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture and McKinsey & Co.
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The Social Action Minute
One of the most popular features of our Sunday services is our Social Action Minute. During this time, a member of the Social Action Committee speaks on a topic of their choice in order to bring awareness and a call to action to the members of our Congregation. These are the archives of the Social Action Minutes presented at our Sunday services. If you missed a service, or are interested in the topic, you can revisit it and get information here. Archives
February 2025
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