Biden-Harris Administration Sues Pants Off Price-Fixing App That Keeps The Rent Too Damn High
Biden-Harris Administration Sues Pants Off Price-Fixing App That Keeps The Rent Too Damn High
You want Harris policy? This is in her policy already!
The Biden-Harris administration, as part of its never-ending crusade to impose communism by requiring that players in the “free market” actually play by the rules, has launched an antitrust lawsuit against the real estate software company “RealPage,” arguing that its app helps landlords engage in illegal price-fixing, inflating rents nationwide and stifling competition.
One of the basic rules of capitalism is that the allegedly free market can’t work its magic if some players are cheating, which is why we have laws against price-fixing and cartels. As Wonkette alum Lisa Needham explains at Public Notice, RealPage pretty much enables price fixing through its algorithm, like so:
The company collects data like vacancy rates, current rent prices, and lease end dates from their clients, who are multifamily housing property managers and landlords. Then, RealPage feeds that aggregated information into its algorithm, which spits back out recommended prices, updated daily, for every available rental.
But it’s not merely a helpful gadget; RealPage effectively allows competing businesses to “share proprietary data to coordinate setting higher rental rates,” and the feds consider that price-fixing, whether the landlords are directly colluding with each other or all going with the rental prices spat out by RealPage.
In their lawsuit, the Federal Trade Commission and Department of Justice argue that price fixing doesn’t stop being price fixing just because an algorithm is doing it for you. The software is designed and sold as a way to drive up rental prices, a point for which the DOJ has impeccable witnesses: the sales pitch from RealPage staffers, who woo landlords with promises like “our tool ensures that [landlords] are driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.”
The case also cites a RealPage exec who kind of gives away the company’s anticompetitive game, explaining that avoiding the uncertainty of the free market is so much better than having to actually compete:
There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down.
When we cheat together, we all win! How could anyone but renters and communists object to that?
As with so many recent outrages by America’s corporate citizens, the RealPage price-fixing mess was first exposed in 2022 by the muckraking journalism nonprofit ProPublica. ProPublica unearthed a RealPage video featuring company VP Jay Parsons cheerfully noting that apartment rents had recently gone up by as much as 14.5 percent, prompting another exec, Andrew Bowen, to marvel at how great the software worked: “I think it’s driving it, quite honestly. […] As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
With such incriminating evidence that RealPage is driving what the FTC calls “algorithmic collusion,” the case might seem to be a slam dunk, but as the New York Times explains (gift link), it’s a novel case, the first time the DOJ has pursued an antitrust lawsuit where the illegal price manipulation is driven by an algorithm.
In a statement, Attorney General Merrick Garland said that “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.” But isn’t that what innovation and entrepreneurship are all about? If this suit succeeds, won’t it have a terrible chilling effect on all the software developers who dream of finding new ways to help their clients rig the markets?
Finally, we’d also like to point out that a pledge to rein in data firms that help landlords do price-fixing is part of Kamala Harris’s first set of policy proposals released just before last week’s Democratic National Convention, as is a promise to stop Wall Street investors from bulk purchases of homes that they then mark up by an outrageous amount — yet another price-fixing scheme that has made housing more expensive, which has in turn been a key driver of inflation in the last few years.
In addition to the administration’s lawsuit against RealPage, Harris is calling on Congress — with a Democratic congressional majority we also need to elect this fall — to pass the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, a bill that would create an industrywide ban on what RealPage is up to.
Man, even if that happens, we can already hear, months in advance, the whining and the lawsuits being filed in Texas.
STORIES ON THIS AND SIMILAR TOPICS!
[Public Notice / NYT (gift link) / FTC / ProPublica / US v. RealPage]
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That Preventing the Algorithmic Facilitation of Rental Housing Cartels Act...why limit it to just rental housing cartels? Why not just a broad act forbidding ALL algorithmic and AI cartel-making and price-fixing schemes that effectively eliminate competition?
If you have the means you can cheat and even get away with it, sometimes forever, sometimes just for a while. Look at all the millionaires that cheat on their taxes, while taxes at the bottom of the heap start at just 13 thousand dollars and change for single people, 15 thousand and change for married people.
https://www.kiplinger.com/taxes/lawmakers-want-irs-to-crack-down-on-wealthy-tax-cheats.
Bear in mind the Republicans radically reduced the amount of additional funds for the IRS Biden managed to get.