If you rent your home, there’s a good chance your landlord uses RealPage to set your monthly payment. The company describes itself as merely helping landlords set the most profitable price. But a series of lawsuits says it’s something else: an AI-enabled price-fixing conspiracy.
The classic image of price-fixing involves the executives of rival companies gathering behind closed doors and secretly agreeing to charge the same inflated price for whatever they’re selling. This type of collusion is one of the gravest sins you can commit against a free-market economy; the late Justice Antonin Scalia once called price-fixing the “supreme evil” of antitrust law. Agreeing to fix prices is punishable with up to 10 years in prison and a $100 million fine.
But, as the RealPage example suggests, technology may offer a workaround. Instead of getting together with your rivals and agreeing not to compete on price, you can all independently rely on a third party to set your prices for you. Property owners feed RealPage’s “property management software” their data, including unit prices […]
This trend is occurring not only in housing but also in retail sales. It is a classic perversion of the market where the seller has access to information not available to the buyer and hence a profound market distortion. A more technologically savvy form of red lining, done on an individual basis rather than neighborhood basis to permit the invisible extraction of profit from the unaware. That this is not only tolerated but subtly encouraged is a signal we are in late stage capitalism where the buyer cannot trust the market to be honest and transparent.