How does competition policy need to change in a world of artificial intelligence?

This article examines how artificial intelligence (AI), understood by economists primarily as a technology that lowers the costs of prediction, may impact competition policy. It argues that traditional competition policy tools remain largely robust but highlights challenges in detecting anti-competitive intent when decisions are increasingly algorithm-driven rather than human. The paper discusses how AI’s cost structure and access to unique data—potentially limited by privacy or copyright—could influence market concentration and competitive dynamics. It also notes that while AI may complicate enforcement, existing regulatory frameworks, such as the EU’s Digital Markets Act and the UK’s Digital Markets, Competition and Consumers Act, are expected to adapt to AI-related issues. Overall, the article emphasizes the need for nuanced, context-specific analysis of AI’s effects on market structure and competition policy.