Tackling Anticompetitive Parallel Conduct under Personalized Pricing

Abstract

This article investigates under what circumstances parallel conduct under personalized pricing is anticompetitive and whether it is within the scope of competition law, depending on which dimension of consumer preference heterogeneity is targeted by rival firms. Whilst enforcement against the use of personalized pricing based on consumers willingness to pay, and the lack thereof with respect to brand preferences, is problematic due to the inherent ambiguity at the inferential phase; the exploitative use of personalized pricing based on heterogeneous levels of search costs might be beyond the reach of competition because its sustainability is not underpinned by a collusive agreement. In contrast, evidence that firms are obstructing consumers use of third-party price aggregators may provide an unambiguous signal that they are colluding to obfuscate prices.