New technologies are making it easier for corporations to set prices and discriminate against individual consumers, the Biden administration's top consumer watchdog said Tuesday.
Algorithms allow corporations to set prices without explicitly consulting with one another, posing a brand new challenge for regulators overseeing the market, Federal Trade Commission Chairwoman Lina Khan said during a media event hosted by KFF.
“I think we could be entering a somewhat new era of pricing,” Khan told reporters.
Khan is taken into account one of the vital aggressive antitrust enforcers in recent U.S. history and has been particularly concerned with the harm that technological advances could cause to consumers. FTC and Department of Justice antitrust enforcement agencies setting a record for merger challenges within the fiscal 12 months ended September 30, 2022, in keeping with Bloomberg News.
Last 12 months, the FTC successfully blocked the biotech company Illumina Acquisition valued at over $7 billion from the cancer early detection company Grail. The FTC, Department of Justice and Department of Health and Human Services launched an internet site on April 18. healthycompetition.govto make it easier for people to report suspected anti-competitive behavior in healthcare.
The American Hospital Association, the most important industry group, has steadily criticized the Biden administration's approach to antitrust enforcement. In comments in September on proposed guidance issued to corporations by the FTC and the Department of Justice, This is what the AHA said “The guidelines reflect a fundamental hostility to mergers.”
Price fixing removes competition from the market and usually makes goods and services dearer. The agency has argued in court filings that price-fixing “is still illegal even when achieved through an algorithm,” Khan said. “There is no algorithmic exception to the antitrust laws.”
By simply using the identical algorithms to set prices, corporations can effectively charge the identical prices “even if they don't go into a back room, shake hands and set a price,” Khan said, using residential property managers for example.
Khan said the commission can also be taking a look at using artificial intelligence and algorithms to set prices for individual consumers “based on all this specific behavioral data about you: the websites you've visited, you know, who you've had lunch with.” , where you reside.” “
And as health care corporations change the best way they structure their businesses to maximise profits, the FTC is changing the best way it analyzes behaviors that would harm consumers, Khan said.
Hiring individuals who can “help us look under the hood of some inscrutable algorithms” is a priority, Khan said. She said it has already paid off in the shape of legal motion, “which is only possible because we had technologists on the team helping us figure out what these algorithms were doing.”
Traditionally, the FTC polices health care by difficult local or regional hospital mergers which have the potential to scale back competition and increase prices. But healthcare consolidation has evolved, Khan said.
Mergers of systems that don't overlap geographically are increasing, she said. In addition, hospitals are actually often buying up doctor's practices, while pharmacy profit managers are starting their very own insurance firms or mail-order pharmacies – or vice versa – and pursuing “vertical integration” that may harm consumers, she said.
The FTC is hearing increasing complaints about “how these companies are using their monopoly power” and “exercising it in ways that result in higher prices for patients, less service and worse conditions for health care workers,” Khan said.
Monitoring non-compete clauses
Khan said she was surprised at what number of health care staff responded to the commission's recent proposal to ban “non-compete agreements” – agreements that may prevent employees from moving to latest jobs. The FTC issued its final rule banning the practice on Tuesday. She said the ban was targeted at low-wage industries like fast food, but that most of the comments in favor of the FTC plan got here from health care professionals.
Healthcare staff say non-compete agreements are “both personally devastating and also hinder patient care,” Khan said.
In some cases, doctors wrote that their patients were “really upset because they wanted to stay with me, but my hospital said I couldn't,” Khan said. Some doctors ended up commuting long distances to avoid having to maneuver the remaining of their families after changing jobs, she said.
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