Research On Regulation Of Tacit Algorithmic Collusion By Collective Dominance

Oligopoly is a market structure between perfect competition and narrow monopoly,with only a few competitors and has high barriers to entry in.Under oligopoly,since the number of competitors is extremely small,each competitor is likely to influence the competition strategy of others by changing factors such as prices or outputs.The core of oligopoly is that it provides the possibility for the formation of tacit collusion.Tacit collusion,according to the Cournot model proposed by economists,is a theory that under oligopoly structure,even if the oligarchs do not have any intentional contact behavior,they can also determine the best outcome based on mutual judgments about the other party’s future actions,in order to achieve the Nash equilibrium and thus realize mutual profit maximization.Under the tacit collusion,the total output of the market is lower than the total output of the market under the conditions of perfect competition,which also provides a theoretical basis for the intervention of the anti-monopoly law.With a series of economic models enriching and perfecting the elements of tacit collusion,the Harvard School and Chicago School have launched a discussion on whether tacit collusion has the necessity of regulation in the sense of antitrust law.The Harvard school,represented by Turner,held an opposing view,believing that the antitrust law should not adjust tacit collusion.The reasons for his argument mainly include:(1)Tacit collusion of competitors in the oligopoly market is reasonable;(2)Prohibition of tacit collusion will prevent potential competitors from entering the relevant market;(3)Prohibition of implied collusion will turn the role of the court to a price regulator;(4)The court lacks any effective remedial measures or judicial orders at the legal level.The Chicago School,led by Posner,criticized Turner’s views for the following reasons:(1)Maintaining high monopoly prices is not the only rational choice for oligarchs to rely on;(2)Most oligopoly market is formed because of the existence of high market entry barriers.It is not feasible to rely on the entry of external competitors to eliminate the impact of tacit collusion;(3)The change of the role of the court is not possible.Therefore,in general,tacit collusion is necessary for anti-monopoly regulations.With the development of the digital economy,the involvement of algorithms has led to the emergence of new features within tacit collusion.Among the four algorithm types of messenger algorithms,hub-and-spoke algorithms,predictable agent algorithms,and digital eye algorithms,the latter two algorithms may lead to the problem of tacit collusion,and greatly simplify the conditions for the occurrence of tacit collusion,making the issue of regulation imminent.During the judicial practice of regulating tacit collusion in the United States,the court has always insisted on the determination of monopoly agreement in Article 1 of the Sherman Antitrust Act,and attempted to explore the path of regulation by expanding the concept of monopoly agreement.In a series of cases,the United States has explored the criteria for determining"conscious parallel behavior"+"additional factors",but it has always been difficult to perfectly resolve the requirements of "a meeting of minds”to prove that there is a connection between competitors.As a latecomer country in the field of competition law,the European Union has explored a regulatory path for collective dominance,and in a series of judicial practice cases,the elements for determining the collective dominance has gradually expanded from a simple economic connection to the influencing factors of market structure.Finally,three main components of collective dominance are:(1)The relevant market has high transparency so that competitors can reach cooperation;(2)The retaliation mechanism for deviations makes tacit collusion can be implemented repeatedly;(3)In the present and foreseeable future,it will not be subject to countermeasures from competitors,suppliers,consumers and other external forces.Collective dominance has a natural advantage in the field of regulating tacit collusion.Its regulatory logic evades the requirement for proof of intention contact between competitors,and can effectively deal with the tacit collusion under algorithm intervention.China’s current Anti-Monopoly Law also adopts two paths in the regulation of tacit collusion:concerted action and collective dominance.The former has the same problem as the United States,which can only deal with explicit collusion made in a secret way,and is difficult to effectively tackle of tacit collusion;the latter is contained in Article 19,but avoidance and misunderstandings in law enforcement and judicial practice make it difficult to give full play to the role it should have.Collective dominance system has broad development prospects in terms of tacit collusion problem and should be valued properly.On the one hand,it has the practical necessity and feasibility;On the other hand,it can overcome the obstacles under concerted action,cooperate with monopoly agreement to form a two-level algorithmic collusion regulation system,and cooperate with the concentration to form an effective mechanism for pre-prevention and post-regulation of tacit algorithmic collusion.