When the current difficulty settings were introduced, the devs announced what was happening before the change and how they fixed it. I know it’s almost a year old, but this is the latest stuff I could find about difficulty that the devs mention in official news (and haven’t changed it, unless they changed something and didn’t tell us).
Quoted from this thread (by Sirrian):
"We have removed difficulty from both Arena and PvP Invasion/Defense. Now as you progress in rank from 15 to 1, and in Arena from 0 wins to 8 wins, the AI Combo Breaker will gradually turn off, to make the games fair (and a little harder).
For anyone wondering what the AI Combo Breaker is, it’s a clever little piece of code that biases the game in your favor, making sure the AI never gets too lucky with gems dropping in (unless YOU get very lucky first!). We think that anyone progressing up to the top ranks of PvP/Arena deserves a bit more of a challenge though, so now you will get a fair fight!"