Automated Pricing and Islamic Commercial Justice: A Jurisprudential and Economic Study of Price Determination in the Digital Economy

Abstract

The digital transformation of commerce has fundamentally changed the traditional mechanisms through which prices are determined. Increasingly, firms employ automated software, algorithmic systems, machine learning, and large-scale consumer data to determine, recommend, or continuously modify the prices of goods and services. Such systems may respond to demand, supply, inventory, time, location, competitor prices, purchasing behaviour, and estimated willingness to pay. Although automated pricing can improve market efficiency, reduce transaction costs, and facilitate more responsive resource allocation, it can also generate concerns relating to information asymmetry, consumer vulnerability, discrimination, deception, exploitation, and market manipulation. These developments raise important questions for Islamic commercial jurisprudence because Islamic law does not evaluate commercial transactions solely according to their formal contractual structure but also considers justice, mutual consent, transparency, prevention of harm, and protection of wealth. This study examines automated pricing through an integrated jurisprudential and economic framework. It analyses the concepts of dynamic pricing, personalized pricing, algorithmic price discrimination, consumer welfare, and information asymmetry and relates them to classical Islamic principles including ʿadl, tarāḍī, bayān, gharar, tadlīs, ghabn, iḥtikār, and maṣlaḥah. The study argues that automation itself is neither inherently permissible nor impermissible. Rather, the legal and ethical status of an automated pricing mechanism depends upon its objectives, data inputs, pricing methodology, degree of transparency, relationship to genuine market conditions, and consequences for contracting parties. The study proposes a Shariah-oriented framework based on transparency, genuine consent, proportionality, non-exploitation, market integrity, consumer protection, and accountability. It concludes that Islamic jurisprudence can accommodate technological innovation while requiring automated pricing to remain within the normative boundaries of commercial justice.

Keywords: Automated Pricing; Islamic Commercial Justice; Algorithmic Pricing; Islamic Jurisprudence; Digital Economy; Personalized Pricing