Price setting determines a company’s profitability, its position against competitors, and consumers’ perception of it. Behind a displayed price intersect cost constraints, market dynamics, and, recently, algorithms capable of recalculating a price in real-time. Understanding these mechanisms allows for distinguishing real strategic choices from adjustments that are imposed.
Dynamic Pricing by AI: What Algorithmic Pricing Changes
Since 2024, several major European airlines (Air France-KLM, Lufthansa Group, most low-cost carriers) have been gradually abandoning pricing class grids in favor of continuous pricing driven by artificial intelligence. The price of a ticket is calculated in real-time based on occupancy, demand, competitor rates, and booking history.
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Lufthansa renewed a partnership with PROS in January 2026 to deploy this model across all its brands, including ancillary services. The airline sector serves as a laboratory here, but e-commerce and hospitality are following the same trajectory.
To grasp the principle of price setting in this context, one must admit that the very notion of “catalog price” becomes blurred: the rate varies from one visitor to another, from one hour to another.
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This evolution raises a direct legal question. An opinion from the French Competition Authority, published in 2025-2026, examines the competitive functioning of artificial intelligence agents and the risks of algorithmic collusion. When two competing companies use the same pricing software, algorithms can converge towards similar prices without explicit agreement. The legal qualification of these situations remains an open issue for competition law.
Price Setting and Regulatory Framework: The Limits Imposed by Law
The principle of pricing freedom remains the rule in a market economy. A company sets its prices according to its business strategy, costs, and objectives. However, several regulations frame this freedom.
- The prohibition of selling at a loss protects suppliers and small businesses against the predatory pricing policies of large distributors.
- Unfair commercial practices (misleading promotional pricing, false promotions) are sanctioned by the DGCCRF, which has, for example, reprimanded the company Volotea for its post-purchase price adjustment practices.
- Comparative advertising on prices is allowed under strict conditions: it must concern comparable goods or services and not mislead.
- In certain sectors (energy, health, public transport), prices remain regulated or subject to regulatory caps.
The most recent debate concerns dynamic pricing in live entertainment and sports. Organizations like Football Supporters Europe and Euroconsumers are calling on the European Commission to ban this practice for cultural and sporting events. Their argument: dynamic pricing excludes less affluent audiences and creates unfair differentiation among spectators of the same event. FIFA itself has introduced dynamic pricing for some of its events, amplifying the controversy.
Pricing Methods: Beyond Cost Markup
The most common method remains calculating the cost price plus a margin. It has the merit of clarity: direct costs (raw materials, labor) and indirect costs (rent, insurance, administrative expenses) are added together, and then a margin rate is applied. The problem is that it completely ignores what the customer is willing to pay.
Pricing by Perceived Value
This approach starts from the customer. The price reflects the benefit that the buyer attributes to the product or service, not its manufacturing cost. A SaaS software that saves a team several hours a week can sell well above its unit development cost because the perceived value far exceeds the production cost.
Field feedback varies on the ease of implementation. Assessing the willingness to pay of a customer segment requires surveys, price testing, and sometimes months of iteration. For a small artisanal business, this method remains more theoretical than practical without support.
Competitive Alignment and Penetration Pricing
Setting a price based on competition requires a good understanding of the market. Pure alignment (same price as the main competitor) limits risk but also differentiation. Penetration pricing (low rate to gain market share, then gradual increase) works in markets with high price elasticity, where consumers easily switch suppliers.
Conversely, skimming (high price at launch, gradual decrease) targets buyers willing to pay more for novelty. This strategy assumes a sufficient product differentiation to justify the initial premium.
Algorithmic Pricing and Competition Law: A Framework Under Construction
The proliferation of AI pricing tools poses a problem that current law has not anticipated. Recent academic work and analyses from the French Competition Authority highlight the risk of tacit algorithmic collusion. Two companies that exchange no information can arrive at identical prices simply because their algorithms observe each other and converge.
Proving algorithmic collusion remains extremely difficult to establish with current legal tools. Competition law traditionally requires a meeting of minds or a concerted practice. However, when the pricing decision is delegated to a machine, the very notion of “will” becomes ambiguous.
A report from the French Senate (2025) and several specialized legal publications call for adapting the legal framework. Suggested avenues include the obligation of transparency regarding pricing algorithms and the creation of a specific liability regime for pricing software developers.
Price setting is no longer just a matter of accounting or marketing positioning. It now touches on competition law, consumer protection, and the regulation of artificial intelligence. Companies that delegate their pricing policy to an algorithm gain in responsiveness but expose themselves to a regulatory risk that is still poorly defined.