As a high-frequency vocabulary that appears in academics and life，algorithms have moved from technology to application. However，the pricing behavior based on algorithm has illegal risks in competition law，such as collusion and price discrimination. The Pricing Algorithms report released by the UK Competition and Markets Authority in October 2018 explains and responds to these questions from the perspective of law and economics. Based on the report，the author summarize the working principles，application scenarios，competition effects and legal risks of the pricing algorithm. Drawing on foreign experience，as far as China is concerned，it is necessary to strengthen research on algorithms and their applications，and we should adopt a tolerant attitude towards new technologies，and make appropriate responses from competition rules.