Dutch competition regulator calls for transparency as algorithms take control of prices
Consumers deserve to know what drives algorithmic prices.
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- The Dutch ACM wants more transparency on algorithmic pricing because consumers often cannot see what drives prices.
- Its airline ticket study found 30 to 35 different prices on a single flight on average.
- The regulator says many consumers wrongly believe past searches or device type change ticket prices.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
The Netherlands Authority for Consumers and Markets (ACM) is calling for greater transparency on algorithmic pricing.
According to the competition supervisor, consumers often have little insight into how algorithms determine prices.
Prices are based on various factors, including supply and demand from competitors. As a result, the price of a product can fluctuate significantly, meaning some consumers pay less than others.
To gain more insight into how algorithmic pricing works in practice, the Dutch competition regulator looked into computer-controlled pricing of airline tickets.
ACM study reveals significant airline ticket price fluctuations
The study showed that prices may vary significantly for seats on the same flight. During the sales period, researchers found 30 to 35 different prices on a single flight on average. On top of that, 1 in 3 tickets costs at least 40% more than the average ticket price, with prices falling gradually right before departure and rising sharply around two months before departure.
The lack of understanding of how algorithmic prices are set leads to uncertainty and misconceptions about the pricing process and undermines consumer confidence, the ACM concludes.
In addition, the “search costs” for consumers are increasing: it takes more time and effort to book a flight at the best price. Consumers in vulnerable situations may be hit harder as a result, because they cannot wait for prices to drop or are less able to determine when it is a good time to make a purchase.
At the same time, algorithmic pricing has benefits. For example, automation can reduce companies' costs and help them manage capacity more efficiently, resulting in lower prices.
However, consumers know too little about what drives prices. According to the ACM’s study, almost half of all consumers (46%) believe that previous searches affect ticket prices, while a quarter (25%) believe that the device they use has an influence on ticket prices. By the way, both statements are incorrect, the competition regulator states.
“The findings from the aviation sector are relevant because similar techniques are also used in other sectors,” Martijn Snoep, Chairman of the ACM, says in a press release, adding that companies will increasingly use algorithmic pricing as more data and AI technology become available.
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Regulators stress the need for public debate on automated pricing systems
“Transparency is necessary to facilitate a public debate on the desirability and consequences of this development, and on how we intend to address it with a view to ensuring the proper functioning of markets and preventing the exploitation of people’s vulnerabilities,” Snoep concludes.
The ACM’s report is a draft that’s up for consultation. Business owners, consumer organizations, and other interested parties have until November 9th, 2026, to respond to the supervisor’s findings.
