Recommender Systems: Approaches to Shape a Safe, Competitive, and Innovation-driven Future

Originally published in the July 2022 Edition of Competition Policy International’s Antitrust Chronicle.

In most digital platforms recommender systems provide consumers with recommendations across a variety of contexts. While recommender systems generate efficiencies by lowering the cost and improving the quality of product discovery, their impact on individuals’ purchase and consumption has the potential of affecting downstream competition of products and industries. These systems may also present sensitive issues for national security, democracy, and public health. Recommender systems have therefore come under increasing scrutiny from governments around the world in recent years. The scale of efficiencies and benefits offered by recommender systems motivates their continued use and expansion in the future.

In this paper we explore approaches that merge innovation and regulation as part of technological advancement. We offer an approach built on increased transparency on the side of companies regarding both their data and algorithms, as well as through collaborations between digital platforms, academics, and regulators. By taking responsibility for regulating their recommender systems in the short-term, companies will be well-positioned to reap long-term benefits and to serve as leaders in the ecosystem. Improved regulation and monitoring by external bodies will also help cultivate the market. With digital regulations of these systems still being in a relatively nascent stage adopting these types of approaches can help shape a safe, competitive, and innovation-driven future.