The Competition and Markets Authority, which is stepping up its focus on the tech sector, said that algorithms can harm competition in many ways, for example by reducing the choice in search results or allowing companies to promote their own products above those of rivals. Algorithms have long faced criticism from civil society, activists and academics over transparency. There was widespread outcry last year following a scandal surrounding the use of an algorithm to determine examination grades in the UK when students were prevented from sitting exams because of the coronavirus pandemic.
This is an interesting development as the regulators become aware of the increasing economic impact on the users (often in a negative way) as the proprietary algorithms are beyond scrutiny (they form the model for businesses competitive edge).
However, there is no clarity on the price fixation and behaviour nudging (therefore the immense data being sucked up for targeted marketing) and worse still, psychological manipulation in several subtle ways.
The watchdog said it anticipated potential roles for regulators, including crafting clear standards on ethical algorithms to businesses, testing algorithms in “regulatory sandboxes” under supervised conditions, and performing “ongoing algorithmic monitoring” of systems.
I think it is a welcome development to reign in the “consumer side” of the algorithmic marketing and subsume a greater role to prevent the harms.