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Algorithmic Pricing and Sectoral Oversight: Smart Markets, Smarter Telecommunications Regulation

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  • Gannon, John PL

Abstract

The integration of artificial intelligence (AI) into pricing systems has heightened longstanding concerns about tacit collusion, particularly in structurally concentrated sectors like telecommunications. While competition authorities struggle with doctrinal limits around algorithmic coordination, this paper argues that sectoral regulators, such as in telecommunications, are well placed to respond. Furthermore, rather than expanding direct oversight of AI tools, regulators should adopt a posture of focal point disruption: strategically examining how regulation itself influences the predictability, observability, and dimensionality of competition. Drawing on coordination theory and recent merger jurisprudence, the paper identifies existing rules, such as those governing offer presentation, personalization limits, and product standardisation, that may inadvertently entrench collusive equilibria. In AI-mediated environments, these effects can be magnified. The paper proposes practical criteria for regulatory design that preserve asymmetries, support selective transparency, and reintroduce unpredictability into market interactions. Rather than waiting for general competition law to evolve, sector-specific regulators must actively assess whether their frameworks stabilize tacit alignment. The aim is not to constrain innovation but to ensure that regulatory architecture does not inadvertently make collusion easier in the age of AI while maximizing the benefits it might bring to competition. This approach offers a flexible, forward-looking alternative to AI-specific regulation or contorted competition law of uncertain effect, grounded in structural awareness and anticipatory governance.

Suggested Citation

  • Gannon, John PL, 2025. "Algorithmic Pricing and Sectoral Oversight: Smart Markets, Smarter Telecommunications Regulation," 33rd European Regional ITS Conference, Edinburgh, 2025: Digital innovation and transformation in uncertain times 331270, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse25:331270
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    References listed on IDEAS

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