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DOJ sues realpage for algorithmic pricing scheme that harms renters

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

#551

Post by sleepybrett »

tmoertel wrote: post #131
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…

The classic way that businesses openly coordinate their pricing is via price matching. Businesses advertise their preferred prices but also promise that they'll match lower prices from competitors. Competitors see these advertisements and set their own prices to approximately match. The FTC does not consider this type of open signaling to be price fixing: > Q: Our company monitors competitors' ads, and we sometimes o…

The rub is that if store and store b got together and negotiated a price they would stick to and not try to undercut each other, that's price fixing, and that is what realpage is doing on a MASSIVE scale.

'Cartel/Corporate' owners own ~70% of the units in Seattle. 11 total companies (big names you should know like gray star and equity residential), to the one they all use realpage. That's 70% of the market price fixed, MINIMUM.

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

#552

Post by vundercind »

Manuel_D wrote: post #233
orwin wrote: post #215

Earlier quoted context omitted.

It's called 'dynamic price control' and is present in most cities in my country. My landlord cannot rise the rent at weird levels, which is based on the selling cost of the unit. Basically if her unit appreciate 5% yoy, she won't be able to rise the rent higher than 5% yoy.

So it's exactly the same thing as SF rent control, albeit with a higher allowable year-over-year increase. There's nothing "dynamic" about it, it's just textbook rent control.

Reads to me like the rate’s dynamic because it’s indexed to something else (potential sale price) that floats freely, rather than being a fixed value.

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

#553

Post by vineyardmike »

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…

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

A lot different... keep reading more.

> Tons of companies use credit bureaus to get the sameCredit data for pricing loans to people

Except credit bureaus (1) are a regulated entity. You can't just use credit data freely, and you can't use any data to write loans. Loans can only be priced using approved credit data from a credit bureau.

(2) Credit bureaus don't price loans. Full stop. Credit bureaus provide risk analysis, it is up to the underwriter to price that based on the provided risk. They provide a score and details on lines of credit. They don't tell you how to price your credit product, nor if you should provide such a service.

> Tons of companies use prices when setting contracts

Yes.

> in a ton of products (metals, food, stocks, and on and on)

Not all of those are "products", some of them are "securities", but yea. Notably, everything you mentioned is a clear commodity.

> those prices are aggregated and curated and that information is sold to all the other companies

More or less.

> thus setting prices

Sorta... thus influencing prices but not directly setting them.

> Stop companies from being able to access this pricing

Companies won't be stopped from accessing pricing data about the market.

> consumers will face more costs as each company has to gather/curate it's own pricing.

The act of gathering and curating data to make pricing decisions is the exact role of a business. Each business. Except basically under the American image of what communism is, I guess. But every business is responsible for their pricing.

> 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'm not sure I agree with any of this statement. Few companies dictate pricing to other companies. Everything about this sentence screams collusion.

> I fail to see how this is much different except that it's politically popular.

Everything about everything is political. The laws are political. The justice system is political. The issues the government fights are political. What would politicians do but politics?

> 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.

And yet it's quite popular in certain markets, and has demonstrated raising prices. The problem with this assumption is the housing market isn't a great efficient commodity market. Moving has extremely friction cost, supply isn't elastic, and a supplier can't easily make more housing units to trade margin for volume. Some housing markets are extremely tight and expensive.

This case is basically text book collusion, wrapped up in a politically relevant bow. As other commenters described, this company requires you to collude by forcing you to use their pricing.

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

#554

Post by JoshTriplett »

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…

Looking at your competitors' or suppliers' prices to set your prices is not illegal.

Looking at the same inputs that your competitors' are using in order to set your prices is not illegal.

Purchasing metrics based on those inputs and using those to set your prices is probably not illegal, depending on what goes into those metrics.

Coordinating with your competitors to set your prices is illegal.

The line between that is not necessarily a super bright line, but some cases are extremely obvious.

One key test: if you undercut your competitors' prices, will you get punished for defecting, other than your competitors potentially lowering their prices in response? If so, you or your competitors or both are probably doing something illegal.

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

#555

Post by vineyardmike »

sithadmin wrote: post #438
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.

Not just by algorithm. In the US, many large employers utilize 'The Work Number' by Equifax for employment verification services, and share details about individual employees as granular as individual paycheck disbursements. This information is visible to other employers that buy in to the scheme, and obviously favors the employer in salary negotiations with a candidate.

> This information is visible to other employers that buy in to the scheme, and obviously favors the employer in salary negotiations with a candidate.

Meanwhile, it is an employee-rights win that the employer can't ask for your prior salary. Which of course they now already know.

We need strong laws that protect people from companies using data. Similar to credit-data usage for loans, companies should be limited to information on an application and in an interview when it comes to making employment decisions. They shouldn't be allowed to use social-media or past employment salary, or similar. At least not without explicit legal requirements and laws governing usage.

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

#556

Post by sleepybrett »

Manuel_D wrote: post #103
biggoodwolf wrote: post #90

Earlier quoted context omitted.

No, many of these building are way under 80% utilization.

Can you reference where that figure is from? Because what I can find, SF has a single-digit vacancy rate: https://nainorcal.com/san-francisco-market-report-march-2023...

How many of those non-vacancies are corporate held air-bnbs where they can make more money for providing almost no service? Hint: it's not a handful. Landlords strategicly take units off the market in ways like airbnb to convince cities that their rents (and profits) are just.

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

#557

Post by MengerSponge »

RayVR wrote: post #549
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…

I think if you read into the details you wouldn’t make such an obviously naive argument. The services provided by companies like realpage remove the ability to negotiate. More importantly, they explicitly manipulate supply coming into the market by removing competition. Take this example: a lease renewal offer is made available, the price is actually higher if the termination date corresponds to relatively high level…

Collusion As A Service

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

#559

Post by mjcl »

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.

Compliance was important because the product (RealPage's AIRM nee YieldStar) works by holding prices higher for longer than the average manager would. The RealPage pricing software is eye-watering expensive and can only be justified if it results in significantly higher revenue.

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

#560

Post by SpicyLemonZest »

mullingitover wrote: post #528
SpicyLemonZest wrote: post #380

Earlier quoted context omitted.

The reason we don't have it in the US is that many cities tried and failed to make it work in the 50s and 60s, to the point that we have a slang term "projects" memorializing the failure. Public housing can't be desirable unless it's safe, and it's not clear whether anyone knows how to run a crime-free public housing project in the US.

If you fail a test and the rest of the class doesn't, it implies that you were just unprepared for the problems the test is not in fact impossible. Just because the US made some poor decisions (e.g obviously cramming 100% poor people into vertical concentration camps doesn't work, you need to have mixed incomes to have a healthy community) in its rollout of public housing many decades ago doesn't mean it's an unworka…

Sure! But the fact that it's possible in principle doesn't automatically prove that you should trust your local city planners when they say they're totally gonna get it right this time.

It's not like public housing has gone completely extinct in the US. Chicago is working on a couple of mixed-income projects, and if they succeed at creating safe units where people who have a choice might like to live, presumably that will boost the popularity of public housing. But given the historical track record, I'm not holding my breath.

Part of the problem, I should note, is that the "100% poor people" thing is very much a live issue. Many American advocates of public housing continue to argue that housing developments _should_ contain 100% poor people, arguing that mixed-income developments are gentrification and/or a handout to developers. In San Francisco, for example, both locals and government officials routinely insist (https://missionlocal.org/2022/06/plaza-east-residents-demand...) that mixed-income projects don't make sense because the market rate units could instead be given to a poor person.

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