Consider the example of dynamic pricing. If you order goods or services online, you’ll probably have noticed that when booking a taxi or buying a rail or airline ticket you can be quoted different prices only minutes apart. The operators will argue that, armed with their complex algorithms, they are responding to a surge in demand with flexible pricing. In principle, that will benefit consumers who are willing to be flexible about when they travel.
It’s not easy to separate that legitimate practice from formal collusion. When does dynamic pricing shade into fixing a market?
A particularly stark and serious example was the banks’ collusion to fix the interest rate known as Libor (the London interbank offer rate), which fed through into market interest rates across the economy.
It wasn’t the banks, was it? It was specific traders, not the banks.
Then this is just insane:
In these unprecedented economic times, the most effective preventative course is pre-emptive rather than reactive. Online retailing is susceptible to collusion because sellers have to go through a single marketplace to reach customers. Their margins are at the mercy of whatever cut Amazon decides to take for itself, which in turn dictates that they will try to recoup the cost from consumers. Competitive capitalism points to the need in retailing, as in other services, to break up the tech cartel. Its pioneers are rich enough already and should have no objection to being cut down to size.
That 5,000 people are using amazon as the fulfillment house makes price collusion among 5,000 people more likely how?