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DOJ sues realpage for algorithmic pricing scheme that harms renters

justice.gov

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Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#511

Post by outop »

tqi wrote: post #470
jasode wrote: post #19

>Armed with competing landlords’ data, RealPage also encourages loyalty to the algorithm’s recommendations through, among other measures, “auto accept” functionality and pricing advisors who monitor landlords’ compliance. I think the "private prices" + "autoaccept" + "compliance" is the key misbehavior that gets RealPage into legal trouble. If competitors want to converge on prices in a legal manner , they have to do…

What I'm having a hard time understanding is why RealPage cared about "compliance" in the first place - do they charge as a % of rent? That seems nuts, I would imagine landlords hate that. If not % of rent then I can't understand why the company would want rents to be higher across the board.

They need landlords to stick to the numbers they pass on, in order that those numbers remain valuable to all of their other landlord clients.

Suppose that you're a big landlord in some area, such that your submitted prices can affect rents for that property type across the area. You might be tempted to submit high prices, wait for your competitors to follow suit, and then reduce your actual rents to undercut them. They (the competitors) naturally wouldn't be happy with this. So RealPage has to be able to show people that they know their numbers are the actual ones.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#512

Post by claytonjy »

andrewmutz wrote: post #510
tqi wrote: post #499

Earlier quoted context omitted.

> the owner is the person who chooses to enforce the pricing algorithm Very interesting - I can't find anything about this on their website, but assuming that is the case I feel like this is the only explanation so far in this thread that makes sense. Other explanations in this thread (marketing, optimizing for all the customers) fall short to me because (as far as I can tell) there is no reward / punishment mechanis…

To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this, so I don't want to argue with people on hacker news about it, but to the best of my understanding this is what is happening: Rental prices in the USA keep going up primarily due to a housing shortage. Revenue optimization algorithms like realpage's do genuinel…

do we know roughly how common use of this or similar technologies are in various markets?

I was under the impression this was quite common, though I have no evidence and would love to be shown otherwise!

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#513

Post by CPLX »

staplers wrote: post #452
CPLX wrote: post #448

Earlier quoted context omitted.

In the case of RealPage that doesn’t seem like the most probable outcome. They’ve been caught red-handed engaged in blatantly illegal price-fixing conduct that has harmed millions of American families. They’re up against the DOJ and plenty of red state AGs too, all signs point to them being nailed to the wall. At least at a corporate level, we don’t have a good track record of sending execs to jail of course.

They'll make a big show for the headlines "record breaking $50 million fine for evil bad company" and it will be 35% of profit made on said practices.

I could definitely be wrong. But that seems unlikely here.

The entire basis of the company is illegal, it's hard to see any settlement here that doesn't involve them completely ceasing to exist and having to pay fines.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#514

Post by tayo42 »

ndesaulniers wrote: post #447
HelloMcFly wrote: post #442

Earlier quoted context omitted.

If anyone else runs into this issue, typically the direct route for things like this is to get involved a discussion with someone in your Total Rewards / Global Compensation team. These are usually the people that confirm the mapping of internal positions to benchmarks, and there is huge between-organizations variability in the quality behind that process. Many times normal managers or more generalist HR Partners (es…

HR is not your friend. Corporate Confidential by Cynthia Shapiro is a recommended read. My advice; get a better offer elsewhere, then see if HR wants to pay you your worth.

Idk how people can even work in hr. Like how dead does your soul need to be to have such a old job.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#515

Post by rangestransform »

RhodesianHunter wrote: post #467
gen220 wrote: post #220

Earlier quoted context omitted.

Meanwhile, I know many people in NYC who spend ~60% of their post-tax income on rented housing. Nobody is happy about it or thinks it's a good idea, but living further out is not perceived as a legitimate option because of the fear of being severed either socially or career-wise. Whether that's a rational fear or not, it's a reality that allows housing prices to outpace wage gains every year. As somebody who used to…

Yes, living in one of the, if not the, most desirable cities on the planet comes with additional costs.

NYC has incredibly incredibly low permitted additional housing per capita last year

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#516

Post by wh0knows »

andrewmutz wrote: post #510
tqi wrote: post #499

Earlier quoted context omitted.

> the owner is the person who chooses to enforce the pricing algorithm Very interesting - I can't find anything about this on their website, but assuming that is the case I feel like this is the only explanation so far in this thread that makes sense. Other explanations in this thread (marketing, optimizing for all the customers) fall short to me because (as far as I can tell) there is no reward / punishment mechanis…

To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this, so I don't want to argue with people on hacker news about it, but to the best of my understanding this is what is happening: Rental prices in the USA keep going up primarily due to a housing shortage. Revenue optimization algorithms like realpage's do genuinel…

This definitely requires some citations. There is no evidence that you are presenting that supports the 2-5% claim. I don’t think you are fully understanding the impact of price collusion or the suit presented here. The DOJ very clearly thinks this is anticompetitive.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#517

Post by natdempk »

ndesaulniers wrote: post #417

Companies are culluding to suppress wages by algorithm, too. Look up a company called Aon, and their product called Radford Data & Analytics.

Similarly companies like Pave also do data collection and sharing to create “benchmarks” around salary and report out salary ranges for comparable companies and locations. I was wondering where the line is drawn between something like this and Realpage? Or even if you do some detailed survey about compensation and distribute it, at what point does this become anticompetitive? All of this does seem to rapidly be becoming the norm with regards to how companies set compensation levels. Curious if anyone with more expertise knows the answer.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#518

Post by vaxman »

natdempk wrote: post #517
ndesaulniers wrote: post #417

Companies are culluding to suppress wages by algorithm, too. Look up a company called Aon, and their product called Radford Data & Analytics.

Similarly companies like Pave also do data collection and sharing to create “benchmarks” around salary and report out salary ranges for comparable companies and locations. I was wondering where the line is drawn between something like this and Realpage? Or even if you do some detailed survey about compensation and distribute it, at what point does this become anticompetitive? All of this does seem to rapidly be becom…

Don't forget FunnelLeasing.com which funnels its victims into Finicity.com which is "consent based" financial surveillance where landlords can monitor the cash, credit and asset accounts of their customers using a pretty dashboard and receive alerts in advance of upcoming trouble (such as layoff by Google, Amazon, Facebook, etc. that facilitated the consumer mindset to "consent" to such madness). It allows the landlords to eject tenants before they default by proving that the tenants are already insolvent according to industry norms.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#519

Post by tqi »

wh0knows wrote: post #516
andrewmutz wrote: post #510

Earlier quoted context omitted.

To the best of my understanding I think the technology does drive up prices, but not in an anticompetitive way. I know people get really passionate about this, so I don't want to argue with people on hacker news about it, but to the best of my understanding this is what is happening: Rental prices in the USA keep going up primarily due to a housing shortage. Revenue optimization algorithms like realpage's do genuinel…

This definitely requires some citations. There is no evidence that you are presenting that supports the 2-5% claim. I don’t think you are fully understanding the impact of price collusion or the suit presented here. The DOJ very clearly thinks this is anticompetitive.

TBF your contention that the impact of price collusion also requires citations. And the DOJ has thought a lot of things, however their track record in court has been not exactly been stellar so I'm not sure how much of a signal that is.

I suppose only time will tell.

Re: DOJ sues realpage for algorithmic pricing scheme that harms renters

#520

Post by lukev »

BurningFrog wrote: post #476
lukev wrote: post #464

Earlier quoted context omitted.

Or one of them could lower to 4.35 and take all the business. Which is normally what would happen without collusion.

I don't have a source for this, so take it as you wish, but as I remember what I read, duopolies can be quite stable. Three party cartels can go either way. But with 4 or more participants, someone will inevitably betray the others out of greed.

Hence the other aspects of antitrust law. Albeit not enforced well of late.
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