The UK competition regulator has launched a market study into algorithmic pricing across online retail, after concerns that software-driven pricing could leave some shoppers paying more than others for identical goods.
The study will examine how retailers use algorithms to set prices in real time, including personalised offers, dynamic pricing during busy periods and loyalty-based discounts. The regulator said it wants to establish whether the practices harm consumers or allow firms to coordinate prices without any explicit agreement between them.
Consumer groups have reported a growing number of complaints about price differences across devices, locations and accounts. Research published last year found that more than a third of UK shoppers had seen a price change during a single browsing session, while separate polling suggested most consumers were unaware that their shopping history could influence what they were charged.
“Pricing technology can deliver real benefits, but it must work for consumers, not against them,” the regulator’s chief executive said. “We want to understand whether shoppers are being treated fairly, and whether smaller retailers can compete on a level playing field.”
The review will also look at the risk of “tacit coordination”, where pricing algorithms across a market learn to match rivals’ prices so closely that competition is effectively suspended. Economists have warned that AI-driven pricing could make collusion easier to sustain, even where firms never communicate with one another.
Travel and delivery apps have been a particular focus, with passengers and customers reporting sharply higher prices at peak times. Retail trade bodies said they would cooperate with the study, arguing that algorithms mostly pass on genuine efficiencies and that consumers benefit from sharper prices and better stock management.
The regulator will publish a call for evidence later this month, with an interim report expected next spring. The study could lead to formal guidance, enforcement action against individual companies, or a recommendation to government for rule changes.