An Analysis of the Abuse of Dominance using Artificial Intelligence (AI) enabled Price Discrimination from a Law and Economics Perspective

Abstract

This research examines AI-driven price discrimination in digital marketplaces, comparing it to competition law. While AI can enhance efficiency and customer welfare, it can also lead to exclusion and exploitative consequences. The EU and China have implemented competition laws and regulations to address unfair price discrimination, demonstrating that a legal reaction based on competition laws is not always necessary. Competition authorities must balance various factors to effectively address AI-driven price discrimination in digital markets. It evaluates the potential for abuse of dominance and the negative impact on competition and consumers. The research uses legal research methodology to examine price discrimination laws and their evolution, comparing them with traditional forms of dominance. It also examines the economic arguments of market efficiency and fairness, consumer detriment, and regulatory action. The paper recommends increased regulation of AI pricing and improved consumer protection measures to prevent unfair market conditions.