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See: not in itself unlawful, by which firms in a concentrated market might in effect share monopoly power, setting their prices at a profit-maximizing, supracompetitive level by recognizing their shared economic interests and their interdependence with respect to price and output decisions and subsequently unilaterally set their prices above the competitive level.' 5 Algorithmic tacit collusion will not affect every (or even most) markets. As Virtual Competition explores, one would expect algorithmic tacit collusion in the near future in markets when several important conditions exist. First, algorithmic tacit collusion would likely arise in concentrated markets involving homogenous products where the algorithms can monitor to a sufficient degree the pricing and other keys terms of sale. 6 Conscious parallelism would be facilitated and stabilized by the shift of many industries to online pricing, as sellers can more easily monitor competitors' pricing and key terms of sale and any deviations from current equilibrium. In such an environment, algorithmic pricing provides a stable, predictable tool, which can execute credible and effective retaliation-in the form of price reductions. Special software may be used to report and take independent action when faced with price deviation, be it from the tacit agreement or the recommended retail price. A second important market condition is that once deviation (e.g., discounting) is detected, a credible deterrent mechanism can be activated. 7 Unique to an algorithmic environment is the speed of retaliation. 8 Computers can rapidly police deviations, and calculate the profit implications of myriad moves and counter-moves to punish 5

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