Artificial intelligence is increasingly being used in business decision-making, from pricing and procurement, to forecasting and customer engagement.
While AI tools can improve efficiency, they also create competition law risks, including algorithmic collusion and AI-enabled cartel conduct.
In the latest of our Big Picture reports, Algorithmic collusion and AI cartels: risks under New Zealand’s Commerce Act, we examine how AI-related competition law risks may arise under New Zealand's Commerce Act, review key international enforcement developments and outline practical steps businesses can take to reduce their exposure.
Ultimately, businesses remain responsible for outcomes generated by AI and other algorithmic tools. New Zealand’s competition laws apply regardless of whether anti-competitive conduct results from human decisions or automated systems.
Key takeaways:
What is algorithmic collusion?
Algorithmic collusion occurs when AI systems influence pricing or market behaviour in ways that reduce competition, creating cartel-like outcomes without direct human agreement.
Does AI use create competition law risks in New Zealand?
AI pricing tools can create competition law risks in ways that are harder to control and less visible than before. While AI and algorithmic tools can improve efficiency, they may also enable systems to monitor or respond to competitors’ behaviour in ways that result in anti-competitive conduct arising more quickly.
What is the New Zealand Commerce Commission’s likely approach?
The Commerce Commission has signalled it is monitoring AI-related competition risks. New Zealand’s existing competition laws will apply regardless of whether decisions are made by people or algorithms.
What are international regulators doing?
Competition regulators globally are increasingly looking at how AI and algorithmic tools influence pricing and market behaviour. They are also taking action. Cases have emerged in a diverse range of countries and regions including the US, UK, European Union, Mexico and Brazil, which highlight the types of tools and behaviours most at risk of breaching competition law.
How can New Zealand businesses mitigate competition risks?
Maintaining robust oversight is essential. Businesses should understand how these tools operate, what data they rely on and how AI-generated recommendations influence commercial decision-making.
Why does this matter for New Zealand businesses?
Businesses that understand and manage AI-related competition risks will be better placed to realise the benefits of these technologies while meeting evolving regulatory expectations.
Read Algorithmic collusion and AI cartels: risks under New Zealand’s Commerce Act below:
Bell Gully advises on competition law compliance, AI governance, regulatory investigations and AI risk management. If you have any questions about the matters raised in this report, please get in touch with the competition contacts listed or your usual Bell Gully adviser.
Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
