US Justice Dept reportedly checking AI rent-pricing biz RealPage

AI rent-pricing software biz, RealPage, is reportedly being investigated by the US Department of Justice's Antitrust Division over claims its algorithms allow landlords to collude with another to inflate prices. The investigation comes after senators urged prosecutors from the Federal Trade Commission and the DoJ to launch a …

[that one in the corner]

purposely built to be legally compliant

Translation: we knew that it would push the rents up (but only if all the landlords bought a copy/subscription, boosting our profits as well), so we put time and effort into pushing the letter of the law just as far as we possibly could.

[ecofeco]

Shocked I tell you!

I am shocked to find price fixing going on in America!

Well, not THAT shocked.

OK, not shocked at all.

[Alumoi]

Re: Shocked I tell you!

I am shocked to find price fixing going on!

There, fixed it for you.

[MiguelC]

A hub-and-spoke cartel

In this case, RealPage is the hub and the landlords are the spokes - "A hub and spoke cartel can be defined as the indirect exchange of information between two independent undertakings which are horizontal competitors on the supplier or retailer level (“spokes”), through another undertaking operating at a different level of the production or distribution chain (“hub”). The hub facilitates the coordination of competition between the spokes without direct contacts between the spokes.[2] Despite the lack of a direct exchange of information among the horizontal competitors, this indirect exchange of information can be considered to have the same negative impacts on the market as a horizontal hardcore cartel."

I have no great doubt RealPage will be fined and agree to pay it "without admitting or denying the findings", as usual...

[Anonymous Coward]

Rephrase that last line

"We specifically wrote this application to obfuscate the details of it's operation to mask collusion to fix prices in rentals by our customers."

with the usual caveat that under pressure each of the parties will point at another party for the blame. The software company will say it only provided the features it's customers expect, and it's up to the user to actually set or accept our "recommendations". The smaller landlords say that as long as the bigger landlords are doing it they are at a disadvantage, so that can't NOT do it and stay competitive. The bigger ones will point out the recommendation system is a black box and they left the software on the recommended defaults.

Much like this summers flare up over forced auction ticket prices, there are no clean hands in this. Everyone knows what the game was, and everyone involved is trying to keep it going for as long as possible because it makes them so much money the can idle properties of move inventory off the long term housing markets to max out profits.

The know that it will take years for these complaints to work through the system, that in all likelihood the fine will be a slap on the wrist, and if it isn't they can appeal it, lobby a subsequent administration to void it entirely, or just ignore a toothless order and keep on doing it. And it only takes a handful of the larger players for this to work in most modern urban markets. There is only so much land to be had.