Outsmarting Pac-Man with Artificial Intelligence, or Why AI-Driven Cartel Screening Is Not a Silver Bullet

Abstract

Competition law has been around since ancient Rome.1 Yet, what concretely constitutes a cartel is still elusive.2 Maarten P. Schinkel has proposed an intriguing definition. He has argued Pac-Man epitomises ‘an international cartel, manoeuvring with the objective to eat away at consumer surplus—the so-called “pac dots”—and the occasional windfall profit—“fruits”‘.3 While doing so, Pac-Man has to escape the oversight of four different competition authorities—the famous ‘ghosts’. The latter do not wander randomly. Each of them uses a different chasing procedure. Any Pac-Man player has to ‘understand the behaviour of the ghosts and manipulate them accordingly’ if she wants to win the game.4 As soon as she understands the ghosts’ rules of engagements, she will be able ‘to foresee the next move of each of them and avoid them all’.5 ... Artificial Intelligence (hereafter, ‘AI’) has the potential to reshuffle the deck of this pursuit and evasion scenario. European Commission (hereafter, ‘EC’) Executive Vice-President and Commissioner for Competition Margrethe Vestager has equated ‘algorithm-based technological solutions’ with a ‘structural competition problem’.6 She has contextualised that ‘the world is changing fast’.7 Technology has always been a driver of evolution.8 In The Square and the Tower, historian Niall Ferguson has explained that more accurate nautical instruments were developed because Portuguese sailors wanted to ‘establish a new and superior trade network viable’.9 Based on Ferguson’s reasoning, Nicolas Petit has argued that ‘the tech giants develop technology to overcome real world constraints [namely] that information is distributed while computation requires centralization’.10 Technology is not, however, the preserve of undertakings. To go back to Schinkel’s metaphor, AI allows the rise of ‘structural competition problem’ favouring Pac-Man, but also the development of new enforcement strategies for Ghosts. Public authorities can similarly use AI systems ‘to keep pace with the changing technologically advanced market landscape’.11 This is common sense. With the complexification of competitive practices, enforcement authorities will have to ‘develop increased technical competence to understand new forms of algorithmic competition’.12 Or to put it differently, one way for Ghosts to ‘outsmart Pac-Man’ is to leave aside their ‘fixed routines’ and adopt balanced ‘proactive and reactive cartel detection tools’.13