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It will be interesting to see how this argued. I personally am not sure such a complex evaluation of the algorithm is needed. If everyone agrees to tell Frank w

It will be interesting to see how this argued. I personally am not sure such a complex evaluation of the algorithm is needed. If everyone agrees to tell Frank what they charge with the understanding Frank will use this data to tell you what to charge, that’s collusion.

alephnerd 3y ago
You don't need to evaluate the algorithm. If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this.
- fbdab103 3y ago
  What if the algorithm turns out to be tuned in such a way as to essentially never reduce prices? That is, the algorithm is deliberately crafted in such a way so as to always favor the renters vs the rentees, could that weigh into the argument at all?
  - alephnerd 3y ago
    Idk. To me at least, what the algorithm is doing doesn't actually matter. What actually matters is whether a set of players using a singular algorithm can count as price fixing or not. Like is that coordination or not? This is a fundamental question for the entire API industry, ML Industry, and any other industry dependent on algorithms.
    - minkzilla 3y ago
      I think that is a good question. I am not 100% but I do think you could take the algorithm to extremes and it does matter. Algorithm A - professionally_evaluated_price + inflation Algorithm B - average_price_of_cohort_you_agreed_to_join + 0.01 The first algorithm is super simple and is conceivably how many landlords might do it anyway and is based on value of your goods. Everyone using it wouldn't raise prices or hurt consumers. The second algorithm is basically agreeing with a cohort that you will never undercut each other and slowly raise prices. This obviously hurts renters and raises prices.
      - chii 3y ago
        but algorithm B requires that the cohort you joined be big enough to have a material effect on the market price of said goods/services. So at that point, it's not the algorithm, but the cohort that's at fault of price fixing. So is there proof that you joined a cohort? Does using the same software count as joining a cohort?
        fbdab103 3y ago
        These two bullet points from the article seem to indicate that RealPage covers a large swath of the market, and that compliance is mandatory. >The software company actively "polices" landlords to ensure that they comply with the rent cost it generates, the lawsuit alleges. Failure to impose the RealPage rents could lead to landlords being expelled from the organization, according to the suit. > RealPage's software has set the rent at more than 30% of apartments in multifamily buildings in D.C. and 60% of units in large multifamily buildings, per the lawsuit. The percentages are even higher for the broader D.C. metro area.
        minkzilla 3y ago
        Do you have to be successful in price fixing for it to be illegal or is just trying to price fix enough? That is a serious question - I do not know.
- toast0 3y ago
  In my mind, you can't claim collusion because everyone is using the same algorithm. But you can claim collusion because the parties are sharing information with and broadly following the recommendations of a single company.
FireBeyond 3y ago
... and each of you have a contractual agreement with Frank that you will charge what Frank tells you to at least 80% of the time ... ... and each of you knows that each of you has this same contract ...
- jibe 3y ago
  There is no 80% contractual obligation. They just say them more you accept their suggested price the more effective it is. “To encourage adherence to its common scheme, RealPage explains that for its services to be most effective in increasing rents, lessors must accept the pricing at least 80% of the time,” according to the suit.
  - FireBeyond 3y ago
    “And we will enforce that by secret shopping you and dropping you from the service if you do not”.
    - jibe 3y ago
      That's not in the lawsuit, so I don't think it is a valuable addition to the conversation. If it was even implied lawyers would be eager to include it.
      - FireBeyond 3y ago
        This is a 'complaint'. There is zero requirement to include all evidence that they intend to reference in court. That being said, it absolutely is referenced: > RealPage actively polices Defendants’ agreement to ensure compliance. > This data includes the rents that Defendant Landlords actually charge, providing RealPage with a mechanism for assessing whether Landlords “cheat” on their agreement by deviating from the rent dictated by RealPage’s RM Software. > Their agreement is reflected in existing documents, has been publicly acknowledged by cartel members, and is closely policed to ensure compliance. > Deviations from the RealPage-generated rent are referred to as “overrides.” Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing. > An internal presentation created by Defendant Greystar explicitly acknowledges that RealPage RM Software users should each seek to accept at least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f using revenue management increases more consistent outcomes.” > Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable. > Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent. Sounds like it's very much in the lawsuit. I'm not sure how you come to any other conclusion. It's a core tenet across multiple pages of it. In your previous comment you try to imply it's just "encouraged". And now you're making statements that are demonstrably incorrect (and I found those examples with less than five minutes of skimming the court complaint, so it's hard to imagine how you missed them all).

alephnerd 3y ago

You don't need to evaluate the algorithm. If a subset of companies use the exact same algorithm for price discovery, is there a form of price-fixing? This is the key question being argued. If the courts rule against Realpage, then any form of algorithmic price discovery en-masse could be found to be anti-competitive. This might mean you can't use TheTradeDesk and Google Adsense en-masse for example. Basically, as of today, a lot of price discovery is now automated by a majority of companies using a handful of vendors for this.

fbdab103 3y ago
What if the algorithm turns out to be tuned in such a way as to essentially never reduce prices? That is, the algorithm is deliberately crafted in such a way so as to always favor the renters vs the rentees, could that weigh into the argument at all?
- alephnerd 3y ago
  Idk. To me at least, what the algorithm is doing doesn't actually matter. What actually matters is whether a set of players using a singular algorithm can count as price fixing or not. Like is that coordination or not? This is a fundamental question for the entire API industry, ML Industry, and any other industry dependent on algorithms.
  - minkzilla 3y ago
    I think that is a good question. I am not 100% but I do think you could take the algorithm to extremes and it does matter. Algorithm A - professionally_evaluated_price + inflation Algorithm B - average_price_of_cohort_you_agreed_to_join + 0.01 The first algorithm is super simple and is conceivably how many landlords might do it anyway and is based on value of your goods. Everyone using it wouldn't raise prices or hurt consumers. The second algorithm is basically agreeing with a cohort that you will never undercut each other and slowly raise prices. This obviously hurts renters and raises prices.
    - chii 3y ago
      but algorithm B requires that the cohort you joined be big enough to have a material effect on the market price of said goods/services. So at that point, it's not the algorithm, but the cohort that's at fault of price fixing. So is there proof that you joined a cohort? Does using the same software count as joining a cohort?
      - fbdab103 3y ago
        These two bullet points from the article seem to indicate that RealPage covers a large swath of the market, and that compliance is mandatory. >The software company actively "polices" landlords to ensure that they comply with the rent cost it generates, the lawsuit alleges. Failure to impose the RealPage rents could lead to landlords being expelled from the organization, according to the suit. > RealPage's software has set the rent at more than 30% of apartments in multifamily buildings in D.C. and 60% of units in large multifamily buildings, per the lawsuit. The percentages are even higher for the broader D.C. metro area.
      - minkzilla 3y ago
        Do you have to be successful in price fixing for it to be illegal or is just trying to price fix enough? That is a serious question - I do not know.
toast0 3y ago
In my mind, you can't claim collusion because everyone is using the same algorithm. But you can claim collusion because the parties are sharing information with and broadly following the recommendations of a single company.

FireBeyond 3y ago

... and each of you have a contractual agreement with Frank that you will charge what Frank tells you to at least 80% of the time ... ... and each of you knows that each of you has this same contract ...

jibe 3y ago
There is no 80% contractual obligation. They just say them more you accept their suggested price the more effective it is. “To encourage adherence to its common scheme, RealPage explains that for its services to be most effective in increasing rents, lessors must accept the pricing at least 80% of the time,” according to the suit.
- FireBeyond 3y ago
  “And we will enforce that by secret shopping you and dropping you from the service if you do not”.
  - jibe 3y ago
    That's not in the lawsuit, so I don't think it is a valuable addition to the conversation. If it was even implied lawyers would be eager to include it.
    - FireBeyond 3y ago
      This is a 'complaint'. There is zero requirement to include all evidence that they intend to reference in court. That being said, it absolutely is referenced: > RealPage actively polices Defendants’ agreement to ensure compliance. > This data includes the rents that Defendant Landlords actually charge, providing RealPage with a mechanism for assessing whether Landlords “cheat” on their agreement by deviating from the rent dictated by RealPage’s RM Software. > Their agreement is reflected in existing documents, has been publicly acknowledged by cartel members, and is closely policed to ensure compliance. > Deviations from the RealPage-generated rent are referred to as “overrides.” Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing. > An internal presentation created by Defendant Greystar explicitly acknowledges that RealPage RM Software users should each seek to accept at least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f using revenue management increases more consistent outcomes.” > Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable. > Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent. Sounds like it's very much in the lawsuit. I'm not sure how you come to any other conclusion. It's a core tenet across multiple pages of it. In your previous comment you try to imply it's just "encouraged". And now you're making statements that are demonstrably incorrect (and I found those examples with less than five minutes of skimming the court complaint, so it's hard to imagine how you missed them all).