AMZN Amazon.com Inc

By Natalia Drozdiak

BRUSSELS--The European Union's antitrust agency is scrutinizing whether algorithms make it easier for companies to collude over prices online and is considering stricter fines for cartels using those tools, the bloc's competition chief said Thursday.

At issue are programs companies use that continuously crawl the internet to check prices in online shops. That software allows the firms to monitor or adjust prices automatically, thereby potentially helping cartels operate more effectively.

"We need to keep an eye out for cartels that use software to work more effectively," EU antitrust chief Margrethe Vestager said in a speech at an event hosted by the Germany's Federal cartel office. "If those tools allow companies to enforce their cartels more strictly, we may need to reflect that in the fines that we impose."

In a joint report last year, the German and French competition authorities raised the issue of tacit or explicit collusion through transparency of online prices.

Ms. Vestager noted that the practice of using automated price systems was common: around two-thirds of retailers who track rival's prices use automated systems, some of which also use the software to automatically adjust prices.

She referred to one example where two different companies sold posters of music artists like Justin Bieber and agreed not to undercut each other's prices on Amazon.com Inc. (AMZN) by using pricing algorithms to ensure their prices were matched.

Still, she said, not all automated pricing systems are necessarily suspicious, such as algorithms to find the lowest prices, like air fares.

Antitrust authorities in the U.S. and Britain have already investigated some automated pricing cases, such as the posters case. The EU, meanwhile, is looking at whether software has limited the ability of retailers to set their own prices for consumer electronics, in a recently announced e-commerce case, she said.

The EU watchdog said that while the previous antitrust cases dealt primarily with agreements put in place by people and implemented by computers, she said there was capacity for illegal collusion agreements to be struck directly between different companies' software.

"We need to make it very clear that companies can't escape responsibility for collusion by hiding behind a computer program," she said, adding that companies should build pricing algorithms in a way that doesn't allow them to collude with others.

-Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

March 16, 2017 06:31 ET (10:31 GMT)

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