Duane Morris Takeaway: Available now is the recent article in the Journal of Robotics, Artificial Intelligence & Law by Justin Donoho entitled "Ten Design Guidelines to Mitigate the Risk of AI Pricing Tool Noncompliance with the Federal Trade Commission Act, Sherman Act, and Colorado AI Act." The article is available here and is a must-read for corporate counsel involved with development or deployment of AI pricing tools.
While artificial intelligence (AI) pricing tools can improve revenues for retailers, suppliers, hotel operators, landlords, ride-hailing platforms, airlines, ticket distributors, and more, designers and deployers of such tools increasingly face the risk of being targeted in lawsuits brought by governmental bodies and class action plaintiffs alleging unfair methods of competition in violation of the Federal Trade Commission (FTC) Act and agreements that restrain trade in violation of the federal Sherman Act. This article identifies recently emerging trends in such lawsuits, including one currently on appeal in the U.S. Court of Appeals for the Third Circuit and three pending in district courts, draws common threads, and discusses ten guidelines that AI pricing tool designers should consider to mitigate the risk of noncompliance with the FTC Act, the Sherman Act, and Colorado AI Act.
Implications For Corporations
AI pricing tools designed to comply with antitrust and AI laws face fewer risks than those not designed for compliance, of an expensive class action lawsuit or government-initiated proceeding alleging violation of such laws. Moreover, by enabling and automating informed pricing decisions, AI pricing tools hold the potential to drive market efficiencies. This article identifies best practices to assist with such compliance and, relatedly, such market efficiencies.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
