AGCM

The Authority will investigate the possible negative effects on the functioning of the market and on the terms and conditions of the offer to consumers in relation to the use of pricing algorithms and it will look into the methods of communication to the public of air tickets costs and their various components

The Italian Competition Authority has launched a sector inquiry on the use of pricing algorithms for air passengers on the connecting routes between the Italian peninsula and Sicily and Sardinia, characterised by particular mobility needs.

This decision was based on the fact that, in conjunction with the resumption of passenger air transport demand, high price levels at peak demand periods have been found by institutional and non-institutional entities since 2022.

Airlines have been using for years pricing systems which, thanks to the use of algorithms and data processing software, can differentiate and adapt flight costs over time. In recent years, the degree of automation and sophistication of these systems has considerably increased, both in terms of the exponential growth of processable information and in terms of technological evolution. Looking ahead, the use of artificial intelligence and machine learning could lead to self-learning algorithms capable of establishing new pricing criterias.

The inquiry will assess the possible negative effects on the functioning of the market and on the terms and conditions of the offer to consumers in relation to the use of price algorithms, in the context of reference. The inquiry will also look into how air ticket prices and their various components are communicated to the public.

In view of the new regulatory provisions referred to in article 1 of the Italian Assets Decree Law 104/2023 (converted with amendments by Italian Law 136/2023), the Authority may, following the fact-finding inquiry, impose behavioural or structural measures on companies in order to eliminate distortions in competition or to recommend appropriate legislative/regulatory changes so as to improve the functioning of the markets. Furthermore, if - in the course of the proceedings - companies submit commitments, the Authority may assess their suitability to resolve the concerns identified and make them mandatory.

Rome, 16 November 2023