Companies increasingly use algorithms to set prices and create or enhance new products and services. While algorithms can result in many efficiency-enhancing and pro-competitive effects, they can also be used by firms to restrict competition. Competition authorities should be aware of these risks, know how to investigate them and identify any possible harm to consumers, as well as consider how to address this harm. This background note considers these important issues. It was prepared for discussions on “Algorithmic Competition” taking place at the June 2023 OECD Competition Committee.
