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Rental-pricing algorithm used by landlords is illegal?
#1
Personally, I have never relied upon "apps" or the internet to find and secure a place to live.

But nowadays, it seems the younger generations do it constantly.  Amidst all the apps is one that apparently helped landlords to "take the guess work out of determining what to charge for rent."

The algorithms used by the app (the "service") accumulates the 'proprietary' data of all their subscribers, and issues forth a suggested rate which guarantees they are charging as much as  the other members.

From ArsTechnica: US sues RealPage, claims rental-pricing algorithm used by landlords is illegal
 

The United States today sued RealPage, alleging that the software maker distorts competition in rental housing by helping landlords collectively set prices.

"To ensure they secure the greatest value for their needs, renters rely on robust and fierce competition between landlords. RealPage distorts that competition," said the lawsuit filed by the US government and eight state attorneys general. In a press release, the Justice Department said that "RealPage's pricing algorithm violates antitrust laws."

Attorney General Merrick Garland delivered remarks on the lawsuit. "When the Sherman Act was passed, an anticompetitive scheme might have looked like robber barons shaking hands at a secret meeting," he said. "Today, it looks like landlords using mathematical algorithms to align their rents. But antitrust law does not become obsolete simply because competitors find new ways to unlawfully act in concert."



The article shows how reframing the 'objectives' of commerce can allow "price-fixing" to be morally justifiable... or as one member/landlord reportedly said:
 

One landlord observed that RealPage's software "can eliminate the guessing game" for landlords' pricing decisions. Discussing a different RealPage product, another landlord said: "I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and term. That's classic price fixing." A third landlord explained, "Our very first goal we came out with immediately out of the gate is that we will not be the reason any particular sub-market takes a rate dive. So for us our strategy was to hold steady and to keep an eye on the communities around us and our competitors."


While defending it's successful practice, RealPage offered this lament:
 

"We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years," RealPage said.


Which seems odd to me... if this practice is been "used responsibly for years" we simply must know where and who has been doing it... just to be sure...   Hotels? Airlines? "other" rental companies... all not competing but cooperating against the consumers as a whole?
 

The US and states allege that RealPage violated Section 1 of the Sherman Act by unlawfully sharing information for use in competitors' pricing, and by entering into vertical agreements with landlords to align pricing. RealPage is further accused of violating Section 2 of the Sherman Act through monopolization of the commercial revenue management software market.

RealPage, which is also facing a ban on its software in San Francisco, said the lawsuit is "devoid of merit and will do nothing to make housing more affordable."



"...the lawsuit is "devoid of merit and will do nothing to make housing more affordable."...  Spoken like someone who isn't hard-pressed to find somewhere affordable to live.  GenZ is going to eat you alive.  You reap what you sow.
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#2
An interesting flip of perspective from the 'consumer-centric' to the political activist...

From Fox: DOJ targeting AI rental pricing software is misguided, conservatives warn

I have to point out a few quick things that stand out to me...

1) Note how we are suddenly talking about "AI" and not algorithms designed for a specific purpose.
2) Notice how the "objections/concerns" open with a loosely "conservative" sourcing, deliberately conflating political ideology into the discussion.

The suit, is about collaborative price-fixing.  Not politics.  But that is not how this narrative frames the issue.
 

The suit comes as the Biden-Harris administration last month pressed Congress to force corporate landlords to choose between abiding by a 5% cap on rent increases or losing federal tax credits. Vice President Kamala Harris' campaign has also called for a ban on the use of algorithms by rental companies, which her campaign said lets them "collude with each other and jack up rents dramatically."

RealPage has denied those allegations, saying that its software merely advises landlords about whether they should set rent for a given unit higher or lower. It added that it does not encourage them to keep units off the market and only uses nonpublic data in anonymized forms to prevent landlords from getting insights into their competitors' pricing, which the company believes complies with antitrust law. 



The phrasing of "...only uses nonpublic data in anonymized forms to prevent landlords from getting insights into their competitors' pricing" makes it seem like mere "insights" are offered, but the net effect is that rent prices do not swerve (up or down) for the end consumer.... pricing is 'homogenized,' and thus no consumer can benefit from negotiation, or market competition.  This kind of "algorithmic" pricing is simply another end-run around what normally would be considered highly-suspect "price-fixing."

In the greater scheme of things, I have to consider who is the largest "landlord" and where their lobbying dollars, and cabalistic "friendships" manifest themselves in our "political" apparatus.

By using the ideological approach to the narrative they can remove the point of the complaint as presented, in deference to cross-ideology paranoia, hyperbole, and drama.

Why not encourage plain old market competition?  I'll let you think on that...

The effort in the argument is to confuse the complaint... most of it is fairly transparent politics, some is ridiculous political hyperbole and posturing...in the end it speaks for itself... but just for fun....
 

Grover Norquist, founder and president of Americans for Tax Reform, criticized the DOJ's investigation of AI rental software companies and told FOX Business that the probe "smells of an effort to set up national rent control, which has been discussed by other parts of the Democratic Party."


The above is an example of "nothing good can come from our opposing party... ever."  This suit isn't about "national rent regulation," it's about price fixing.  It is not based upon ideology, it's based upon the fact that our citizens are screwed now... continually made incapable of affording a place to live.  And the price-fixing is cementing that reality... much to the joy of industrial landlords.
 

Stephen Moore, a senior visiting fellow in economics at the Heritage Foundation, told FOX Business that consumers use algorithms to determine the best deals for products they're buying, including airfares and lodging, because they are efficient tools to match supply with demand and have value in the housing sector as well.


Because the Hotel industry, other rental big businesses, Air fare... were never challenged like this.  They have NEVER been shown to be on the up and up, and legal suits have been brought seeking remedy for their pricing 'tactics.'  Over and over.
 

"What the Department of Justice is saying is that it should be somehow illegal for landlords to use algorithms and software to figure out how much they can charge for their rental units," Moore said. "If that is the case, then we should also outlaw consumers being able to do the same thing.


No,... the consumers are the victims here... and landlord-clients are not "using algorithms" themselves... they are coordinating prices plain and simple... anathema in a "free"-market.
 

"Having a really efficient, real-time pricing management system where prices can change moment by moment, just like the price of a stock does, enhances consumer and business welfare at the same time," he added.


So does this end with me paying variable rent month to month as the "market" goes up and down (as if the cost of a place to live were part of a gambling game like the stock market?)

Ok... I'll stop.  (but there is more.)
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#3
Personally, I see this as a sidestep of the Anti-Trust laws. Anytime an industry like rental properties starts setting prices based on the same metric, it is a form of Trust.
"Whoever would overthrow the liberty of a nation must begin by subduing the freeness of speech."
- Benjamin Franklin -
 
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