Market watchdog calls for transparency on AI in price setting

The Dutch consumer markets authority ACM has called for increased transparency regarding the use of artificial intelligence (AI) in determining ticket prices following an investigation that revealed significant price disparities. The ACM found that certain airline tickets had up to 35 different prices, while one-third of tickets were priced 40% higher than the average, yet there was no straightforward method for passengers to locate the most affordable fare.

ACM Chairman Martijn Snoep highlighted that this investigation is pertinent because “similar techniques are being utilized in other sectors.” Online retailers, concert ticket platforms, and even fuel stations are employing AI to dynamically set prices based on supply, demand, and competitor rates. However, customers often encounter scenarios where two individuals purchasing the same product at the same time are charged different prices.

Snoep emphasized that AI-driven price setting often leads to a frustrating experience for consumers, who must spend more time searching for the best deal. In response to these challenges, the ACM has urged companies to be more forthcoming about the factors influencing their algorithms and to enhance transparency. Snoep stated, “Transparency is necessary so we can have a public debate about the desirability and the consequences of this development and how we want to proceed, keeping an eye on the way markets function and preventing people’s vulnerabilities being abused.”