Wednesday, January 08, 2025

US Sues Six Landlords over 'algorithmic Pricing Schemes'

The US Justice Department today announced it filed an antitrust lawsuit against "six of the nation's largest landlords for participating in algorithmic pricing schemes that harmed renters."

Posted by lamplighter at 11:32 PM | 9 COMMENTS | permalink

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The Department of Justice said on Tuesday that it filed an amended complaint in a lawsuit against six of the country's largest landlords for participating in algorithmic pricing schemes that have harmed renters.

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-- WMTV 15 News (@wmtv15news.com) January 7, 2025 at 11:55 PM

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More from the article...

... One of the landlords, Cortland Management, agreed to a settlement "that requires it to cooperate with the government, stop using its competitors' sensitive data to set rents and stop using the same algorithm as its competitors without a corporate monitor," the DOJ said. The pending settlement requires Cortland to "cooperate fully and truthfully... in any civil investigation or civil litigation the United States brings or has brought" on this subject matter.

The US previously sued RealPage, a software maker accused of helping landlords collectively set prices by giving them access to competitors' nonpublic pricing and occupancy information. The original version of the lawsuit described actions by landlords but did not name any as defendants.

The Justice Department filed an amended complaint today in order to add the landlords as defendants. The landlord defendants are Greystar, LivCor, Camden, Cushman, Willow Bridge, and Cortland, which collectively "operate more than 1.3 million units in 43 states and the District of Columbia," the DOJ said.

"The amended complaint alleges that the six landlords actively participated in a scheme to set their rents using each other's competitively sensitive information through common pricing algorithms," the DOJ said.

The phrase "price fixing" came up in discussions between landlords, the amended complaint said: ...


#1 | Posted by LampLighter at 2025-01-08 12:31 PM

We'll dismiss this complaint and work to make this practice legal - signed, GOP.

#2 | Posted by HeeHaw at 2025-01-08 02:21 PM

More ...

Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Harms Millions of American Renters
www.justice.gov

... Landlord Cortland Agrees to Cooperate with Justice Department and Enter into a Settlement to End the Use of Common Rental Pricing Algorithms and Competitively Sensitive Data to Set Rents ...

#3 | Posted by LampLighter at 2025-01-08 05:52 PM

True open market competion is good. Mergers and consolidation too often used for profit to negatively affect (as in increase) pricing.

#4 | Posted by Robson at 2025-01-09 07:35 AM

If you get that number direct from a consultant companies API, it's algorithmic.
If a human consultant looks at a spreadsheet using the same formula and tells you a number, it's not algorithmic.

this is why people hate lawyers.

#5 | Posted by sitzkrieg at 2025-01-09 08:19 AM

I'm more concerned about the part where it "Harms Millions of American Renters"

#6 | Posted by hamburglar at 2025-01-09 10:09 AM

True open market competion is good. Mergers and consolidation too often used for profit to negatively affect (as in increase) pricing.
#4 | Posted by Robson at 2025-01-09 07:35 AM

Mergers have never been used for anything less than profit.

Because that isn't obvious to you makes me consider your vision of capitalism a disease.

#7 | Posted by redlightrobot at 2025-01-09 01:48 PM

Every Corporate Landlord in Chicago has used these algorithmic systems to illegally fix prices In collusion with one another now, and for decades before computer collusion.

Price fixing is real.

#8 | Posted by Wardog at 2025-01-09 02:18 PM

__________
#5 | Posted by sitzkrieg at 2025-01-09 08:19 AM
If you get that number direct from a consultant companies API, it's algorithmic.
If a human consultant looks at a spreadsheet using the same formula and tells you a number, it's not algorithmic.

Oh, horrors, "algorithmic" spreadsheet automation! If government has the problem with "algorithms," what are government lawyers going to do about "AI"?

As I've said before, there is nothing here that cannot be done using data from Zillow, Redfin or many other public, private, corporate and other sources and basic spreadsheet. How do people "in the wild," without PMCs, compare housing / rental prices?

RealPage, and their numerous competitors, simply provide automated service (and related services, like tenant screening, billing, etc.) for something any landlord can already do by using Zillow or Redfin, Apartments.com, Homes.com, etc. and using average $/sqft, average rent prices in given area ('premium' / 'discount') and basic spreadsheet formulas.

This is yet another Elizabeth Warren's "stupid populist consumer protection trick" which is going to "protect" no one, but burnish her "cred" with financial/economic illiterates, and blame poor government policies and decisions on "gouging" and "greedy" corporations.

Let's hear the rest of the story, from the sane, non-political, market side:
www.ajc.com - Cortland settles with DOJ in RealPage rental price-fixing probe - AJC, 2025-01-08

|------- "In December, RealPage said the antitrust division told the company it had ended the criminal probe.

Cortland spokeswoman Rachel Prude confirmed in an email Tuesday that the company's employees were no longer under investigation.

"We believe we were only able to achieve this result because Cortland has invested years and significant internal resources into developing a proprietary revenue management software tool that does not rely on data from external, non-public sources," Prude wrote. "We look forward to putting the federal government's investigations behind us."

RealPage said it will "vigorously" defend against the claims.

"We are disappointed that the DOJ, just one month after abandoning its baseless criminal investigation and less than two weeks before the agency changes hands, is expanding its civil lawsuit related to use of revenue management software," RealPage said.

"Fewer than 10% of all rental housing units in the U.S. use RealPage software to suggest rental prices, and our software recommendations are accepted less than half the time, as the DOJ has acknowledged." ...

"This lawsuit will do nothing to make housing more affordable..."
-------|

www.skadden.com - Scadden Arps:
|------- Courts are not required to accept the DOJ and FTC's arguments " and the courts that have considered them so far have not...

The use of algorithms to access and analyze vast amounts of information about market conditions, including competitor pricing, may in fact be profoundly pro-competitive, facilitating more informed, competitive pricing that better reflects supply and demand in the marketplace...
-------|

this is why people hate lawyers.

Yep! And to "amend the complaint," this is why people hate politics and government [lawyers], who can bankrupt or force them into stupid "settlements," unless they are big enough to fight. That's why companies merge, buy out competitors - "go big or go home [bankrupt]".
__________

#9 | Posted by CutiePie at 2025-01-09 05:01 PM

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