Antitrust Experts Warn AI Could Fuel Price Fixing in Agriculture

As artificial intelligence (AI) continues to make inroads into various industries, including agriculture, experts are sounding the alarm over its potential misuse. According to Capital News, while AI promises to revolutionize farming practices, antitrust experts are increasingly worried about the technology being weaponized to undermine competition, potentially harming both farmers and consumers.

The growing focus on AI in agriculture has often centered on the benefits it could bring, such as increased efficiency and productivity. However, per Capital News, the darker side of this innovation is gaining attention, particularly the fear that global agribusinesses might use AI to engage in anti-competitive practices. These concerns are particularly pressing because existing antitrust laws may not be robust enough to prevent such abuses.

David Fisher, senior counsel with the American Antitrust Institute, highlighted the potential risks. “It changes how price fixing happens but it doesn’t change the illegality of it,” Fisher said, emphasizing that AI algorithms could gain access to commercially sensitive information. This access could enable businesses to engage in price-fixing and other anti-competitive practices in ways that are difficult to detect and regulate under current laws.

Already, there are legal battles underway concerning the misuse of AI in agriculture. According to Capital News, the federal government has initiated a lawsuit against AgriStats, a software firm accused of facilitating unlawful cooperation among meat packers. This case underscores the potential for AI to be used as a tool for collusion, with serious implications for market competition.

Related: The Farm to Finance Revolution: How AI Is Transforming Agriculture

Smaller agricultural markets, such as those involving niche crops in the Northwest, may be particularly vulnerable to AI-driven anti-competitive behavior. Peter Carstensen, a University of Wisconsin law professor specializing in agricultural antitrust, noted that the limited number of processors and packers in these markets increases the likelihood of collusion. “It’s much more likely you’re going to have that shared understanding,” Carstensen warned, suggesting that these industries are at high risk if AI is used to avoid competition.

The traditional image of price-fixing, where competitors secretly meet in “smoke-filled rooms,” is becoming obsolete. Instead, Fisher pointed out that competitors can now avoid direct communication by using a third-party AI provider. This provider’s software can analyze production data and other factors, making pricing recommendations that effectively suppress competition. According to Capital News, this process allows companies to manipulate prices without any overt agreements, making it harder for regulators to detect and prove collusion.

“There’s no business justification to share that level of information with their competitors unless they were willing to collude to fix prices,” Fisher said, emphasizing the lack of transparency in such arrangements.

Even more troubling is the possibility that AI could facilitate anti-competitive practices without the need for traditional data-sharing among market players. Carstensen explained that AI could achieve similar price-fixing effects by analyzing publicly available information, thus sidestepping legal prohibitions. “Those are the easy cases,” Carstensen said, noting that this new method of collusion could be even more difficult to combat.

As AI continues to develop, the challenge for regulators and lawmakers will be to adapt antitrust laws to address these emerging threats. According to Capital News, the potential for AI to be misused in agriculture and other industries calls for urgent attention to ensure that technological advancements do not come at the cost of fair competition and consumer protection.

Source: Capital News