Antitrust Authorities Rethink Coordination for the Digital Age

The digital revolution transformed how companies understand markets. Over decades, businesses adopted analytic tools that collect vast troves of data and deploy sophisticated algorithms to decode customer behavior and competitive dynamics. Artificial intelligence (AI) now extends that capability, executing business decisions with efficiency beyond human reach. The benefits, so far, are considerable.

But as dominant approaches and providers emerged, companies came to rely on the same platforms, shared datasets, and similar algorithmic counsel. Some antitrust authorities worry that this convergence can effectively result in coordination, even when it isn’t intended. The rise of “agentic” AI — systems capable of transacting or negotiating with minimal human input — pushes the question further, creating a new frontier for laws written to govern human conduct.

Traditional competition law hinges on intention, and authorities historically focused on human conspirators who strike explicit deals. Now regulators are fashioning novel theories that emphasize the effects — enabling them to pursue outcomes that appear coordinated even without evidence of human intent.

In this new environment, authorities may now view standard business tools — especially those used in revenue or cost optimization — as coordination infrastructures. AI is part of the story, but enforcement attention spans the entire spectrum from basic data sharing to advanced algorithmic coordination.

Enforcement Theories Under Development

Agencies are testing whether shared platforms can substitute for traditional coordination mechanisms, but courts haven’t settled the legal boundaries.

The U.S. Department of Justice (DOJ) increasingly invokes what regulators call the “Bob test”: If it would be illegal for two people to coordinate prices through a third person (named Bob in regulator hypotheticals), it remains illegal when an algorithm performs the same role. This principle focuses on the effects rather than the intent — the coordinated outcome matters more than whether anyone planned to coordinate.

Current litigation shows both agency ambition and doctrinal uncertainty. The DOJ and 10 US states sued property managers that use shared pricing software, alleging rent coordination through common platforms.¹ Private class actions survived motions to dismiss and are proceeding through discovery. These cases represent the most aggressive test of algorithmic coordination theories to date.

Yet courts have dismissed similar cases against hotel operators using comparable theories. One dismissal was affirmed on appeal, another granted in a separate district. The pattern suggests courts remain skeptical of algorithmic coordination theories that lack evidence of traditional antitrust elements like explicit agreement and market harm. Agencies are pushing legal boundaries that most courts have yet to embrace.

The enforcement pattern emerging from active cases suggests a focus on two elements: common platforms and access to nonpublic competitor information. When these elements combine, agencies theorize that coordination mechanisms exist. But traditional antitrust burdens still apply — proving agreement, market effects, and other established elements remains necessary, even if the definition of “agreement” is evolving.

No cases have yet tested business practices involving agentic AI decision-making, but the technology is poised to blur the line between express collusion, which is illegal, and tacit collusion, which is not. Similar concerns are likely to arise when AI agents can “rationally” approximate exclusivity arrangements between companies without any explicit exclusivity provisions.

Technology Vendors in the Crosshairs

Platform-makers face distinct risks as these theories develop, but the liability boundaries remain unclear. Software companies that create analytic tools used by multiple competitors risk becoming coordination facilitators in enforcement narratives, even when coordination was never the design objective.

Issues related to vendor liability raise fundamental questions about technology design and responsibility. Do platform-makers bear responsibility for user behavior? Can design features that provide legitimate market intelligence also create coordination exposure? How do courts assess technology architecture for antitrust purposes? These questions are being litigated in real time without clear precedent.

Some vendors are preemptively redesigning products to limit coordination risks, restricting data flows between competitor users, or compartmentalizing information to prevent cross-competitor visibility. But these design choices operate without clear guidance on which modifications actually reduce legal exposure.

In-house development teams face similar uncertainty. Companies building proprietary analytic systems must consider whether internal tools could be viewed as coordination mechanisms if business partnerships, joint ventures, or industry collaborations expand access. The distinction between legitimate analytic capability and problematic coordination infrastructure has yet to be clearly drawn.

Data providers and benchmarking services face similar questions. Businesses that offer traditional information aggregation and analysis are being reconsidered through coordination lenses, but it remains unclear which practices cross legal lines. The enforcement theories could reshape entire categories of market intelligence services.

Strategic Implications of Legal Flux

The enforcement uncertainty creates immediate business challenges that extend beyond compliance. Companies must weigh operational efficiency against coordination risk without knowing how those risks will ultimately be adjudicated.

Industries with concentrated analytic infrastructures face higher scrutiny, though thresholds for problematic concentration remain undefined. Financial services, telecommunications, healthcare, and other sectors using common data tools operate under theories that could expand from housing precedents.

This creates strategic tensions between technological independence and shared efficiency. Shared platforms offer cost and performance advantages, but common usage potentially creates coordination exposure. Various jurisdictions have banned algorithmic pricing tools in housing markets — with local ordinances in Seattle, San Francisco, Berkeley, and parts of Colorado prohibiting such tools — demonstrating how regulatory responses can emerge faster than court decisions.

For both platform users and makers, the guidance remains directional rather than precise. Technical controls and audit capabilities seem prudent, though their legal adequacy awaits testing through litigation. The mismatched paces of enforcement action and judicial resolution put companies in reactive positions, creating business disruption even when legal theories ultimately fail.

What to Watch

In the long run, it’s unrealistic to expect any legal framework to predict or efficiently regulate technologies that expand economic efficiency across every sector. That holds true for tools designed to optimize revenue or cost, as well as advanced AI systems capable of making decisions themselves.

In the near term, several indicators will reveal whether current enforcement theories gain traction or fade. Pending litigation offers the clearest signals — summary judgment rulings and trial schedules will illuminate judicial appetite for effects-based coordination theories. Whether agencies settle or press ahead in court will reveal their confidence in these novel frameworks.

Political developments may also prove telling. Outside the United States — where antitrust authorities often act as regulators and can impose new restrictions faster — the impact could be more immediate. Congressional hearings, formal guidance, or coordination among agencies in Europe and the UK would signal growing institutional legitimacy. Staff departures or budget reallocations might signal retreating ambition.

Market behavior provides its own intelligence. Platform-makers redesigning products, industry consolidating around safer tools, or companies shifting procurement practices reflect business risk assessments. Insurance market responses and compliance spending offer additional barometers.

The scope of enforcement expansion deserves particular attention. Cases beyond housing would indicate theoretical migration across industries. Financial services, telecommunications, and healthcare represent likely testing grounds due to their concentrated analytic infrastructures and regulatory sensitivities.

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