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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

#531

Post by andrewmutz »

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.

Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior.

We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals (https://www.realpage.com/news/realpage-to-acquire-lease-rent...) and there were 43 million rentals in the US, which means nationally they had less than 4% marketshare.

Obviously, cartel behavior (raising prices above market) does not work if you have 4% of the market. Perhaps their sales have gone up 20X in 7 years and they have enough market power for cartel behavior (doubtful)? Perhaps they have a low marketshare nationally, but they have a high marketshare in a few specific markets? Maybe, lets see what the DoJ says.

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

#532

Post by spaceguillotine »

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…

Recently in used car shopping i've found KBB only gets used when they are pricing trade ins but the cars for sale on the lot have been much higher than the book value and they scoff when you ask them to come down to the KBB used car value that matches, no wonder so many car lots are closing shop.

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

#533

Post by staticautomatic »

Loughla wrote: post #522
HelloMcFly wrote: post #506

Earlier quoted context omitted.

Thank you, yes. This is not an uncommon managerial problem that is often resolved (not always; I've had both experiences), though perhaps not in a timely manner.

I'm currently fighting this. The benchmark for my team is 10-15% lower than just our area. And 30-40% lower than the nation. And it's because we get lumped in with lower skilled titles because of the title scheme on our campus. I can't get any traction with admin or HR, and we're both hemorrhaging people and can't bring in qualified new candidates. It's very frustrating.

I just went through this last week and the trick was getting my finance director to tell HR that she approved the higher amount I wanted to offer. HR will play games with your budget until you take the excuse away.

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

#535

Post by AgentOrange1234 »

ClumsyPilot wrote: post #508
colonCapitalDee wrote: post #456

Earlier quoted context omitted.

No, your time horizon is too short. Prices go up in the short term, which increases profits, which incentivizes competition, which brings prices down in the long term. A few years of increased prices is worth increased efficiency over decades. Prices are going in most industries, US markets are generally quite competitive.

> which increases profits, which incentivizes competition This is a fantasy. Give two examples of major markets where competition has increased recently. The US economy has grown what, 4 times since 1990’s but the number of registered companies has fallen by half.

Does the sheer number of companies correlate with competition?

I can imagine simple hypotheticals like:

A. Two companies that compete with one another in each of markets 1, 2, and 3.

B. Three companies, each with a monopoly on a single market.

I know nothing.

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

#536

Post by brandonfro »

andrewmutz wrote: post #531
wh0knows wrote: post #516

Earlier quoted context omitted.

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.

Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior. We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals ( https://www.realpage.com/news/realpage-to-acquire-lease-rent... ) a…

From the press release: "The complaint separately alleges that RealPage has unlawfully maintained its monopoly over commercial revenue management software for multi-family dwellings in the United States, in which RealPage commands approximately 80% market share."

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

#537

Post by SideQuark »

So companies in the future will not be able to subscribe to another companies algorithms? How is this a lot different?

Tons of companies use credit bureaus to get the sameCredit data for pricing loans to people. Remove this and companies will charge consumers lots more since they'll have to face more risk.

Tons of companies use prices when setting contracts in a ton of products (metals, food, stocks, and on and on) and those prices are aggregated and curated and that information is sold to all the other companies, thus setting prices. Stop companies from being able to access this pricing, and again consumers will face more costs as each company has to gather/curate it's own pricing.

Central banks set prices from which tons of the market sets downstream prices. Is this going to be illegal? Again, blocking this, markets and consumers will face higher costs, same reasons.

There are so many companies whose sole purpose is to set pricing so other companies do not have to do it in house that picking out this one seems ludicrous.

I fail to see how this is much different except that it's politically popular. Rental property owners are not forced to use it, and even have the traditional market forces not to use it: undercut the algo prices and get more business.

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

#538

Post by andrewmutz »

brandonfro wrote: post #536
andrewmutz wrote: post #531

Earlier quoted context omitted.

Honestly the strongest argument I've heard that these algorithms are anticompetitive is "The DoJ thinks they are". So maybe there's some non-public information of anticompetitive behavior. We don't know how many housing units use Realpage pricing algorithms in 2024, but in 2017 when Realpage bought the tech, it was being used in 1.5 million rentals ( https://www.realpage.com/news/realpage-to-acquire-lease-rent... ) a…

From the press release: "The complaint separately alleges that RealPage has unlawfully maintained its monopoly over commercial revenue management software for multi-family dwellings in the United States, in which RealPage commands approximately 80% market share."

That’s 80% of companies who are using revenue management software are using Realpage, not that 80% of rental units are using Realpage revenue management software

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

#539

Post by hiddencost »

SideQuark wrote: post #537

So companies in the future will not be able to subscribe to another companies algorithms? How is this a lot different? Tons of companies use credit bureaus to get the sameCredit data for pricing loans to people. Remove this and companies will charge consumers lots more since they'll have to face more risk. Tons of companies use prices when setting contracts in a ton of products (metals, food, stocks, and on and on) a…

It is in fact illegal to collude when setting commodity prices, yes. Having market prices is not the same as colluding.

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

#540

Post by nilsbunger »

medvezhenok wrote: post #242
SmartJerry wrote: post #218

Earlier quoted context omitted.

Excessive profits are actually the catalyst for competition. THe cycle of capitalism and free markets looks like this: earn excess profits -> people build more supply -> prices come down and excess profits dry up -> people stop building -> earn excess profits. When you fix the 'prices come down and excess profits dry up' all you get is people stop building.

That works in a well functioning, liquid market. If there are barriers to entry for new competitors (like regulatory hurdles, or zoning), this free-market theory falls flat on its face.

The free market theory still works with the barriers, it’s just that the “excess profits” have to get even higher before someone steps in to build.
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