The CMA has published an eye-opening paper on algorithms, showing how they can, if misused, reduce competition in digital markets and cause harm to consumers. So, if you sell online, take note as this paper shows the ‘direction of travel’ on key issues such as personalised pricing, personalised ads and product recommendations. It has launched an accompanying call for evidence.
The CMA acknowledges that machine learning, algorithms and AI can be beneficial for consumers, such as by facilitating individual recommendations for consumers (thus saving time) and allowing businesses to optimise interfaces and actions with customers (‘choice architecture’). However, it is deeply concerned that algorithmic tools and processes can cause online harms and discrimination, not helped by the lack of transparency when they are deployed.