Gergely Csurgai-Horváth: Prohibiting algorithmic foreclosure as a key pillar of digital market regulation. Nr. 2024/2.

This paper addresses concerns relating to algorithmic bias, taking the form of self-preferencing which is perceived to be a key pillar of market regulation in the digital era. Although non-price discrimination against rivals is an essential part of competition in many instances, self-preferencing practices – employed by hybrid digital platforms that do not act as pure intermediaries but are also present in adjacent markets – may potentially lead to anti-competitive algorithmic foreclosure. Accordingly, this paper analyses self-preferencing from a substantive law point of view under Article 102 TFEU and proposes an analytical framework based on which the legality of these kinds of practices can be assessed. The analysis of the established types of abuses suggests that there is a gap in law in the existing types of abuses. Consequently, they cannot or should not be employed to tackle self-preferencing. The findings of the state-of-the-art legal, economics, industrial organization, and empirical research warrant for this potentially new sui generis abuse a case-by-case, effects-based analysis without, however, the Bronner criteria, including, indispensability being part of the legal test.

Keywords: Algorithmic bias, Self-preferencing, Digital platforms, Article 102 TFEU.

The working paper is available for download here.