EU's Vestager warns companies against abusing algorithms

European Competition Commissioner Margrethe Vestager holds a news conference at the EU Commission's headquarters in Brussels, Belgium March 13, 2017. REUTERS/Francois Lenoir

BERLIN (Reuters) - Europe’s antitrust chief on Thursday warned companies against using algorithms to block rivals or form cartels, saying she may slap heftier fines on them if they use such software to commit wrongdoing.

European Competition Commissioner Margrethe Vestager, who is poised to fine U.S. technology giant Google in the coming months for using its algorithm to unfairly demote rival shopping services in internet search results, said she was vigilant to such illegal practices.

“I don’t think competition enforcers need to be suspicious of everyone who uses an automated system for pricing. But we do need to be alert,” Vestager said at a conference organized by the German cartel office Bundeskartellamt.

She pointed to the challenge of tackling sophisticated cartels which use software to fix prices and allocate markets among themselves to the detriment of customers and the economy, saying sanctions should reflect and deter this new tool used by companies.

“So as competition enforcers, we need to keep an eye out for cartels that use software to work more effectively. If those tools allow companies to enforce their cartels more strictly, we may need to reflect that in the fines that we impose,” Vestager said.

The European Commission can penalize companies up to 10 percent of their global turnover for breaching EU antitrust rules.

Reporting by Foo Yun Chee; editing by Robert-Jan Bartunek