3 ms·

> an agreement to use shared pricing recommendations, lists, calculations, or algorithms can still be unlawful even where co-conspirators retain some pricing di

> an agreement to use shared pricing recommendations, lists, calculations, or algorithms can still be unlawful even where co-conspirators retain some pricing discretion or cheat on the agreement. Someone explain how this is different from pricing vehicles based on KBB or other data? Genuinely curious because I don’t know what these agreements look like. If multiple seller/landlord parties all agree to have a single algorithm set prices I understand the FTC’s point. If however they all reference an algorithmic data point and freely choose to set prices I don’t see how that’s collusion.

rahimnathwani 3y ago
If multiple seller/landlord parties all agree to have a single algorithm set prices I understand the FTC’s point. If however they all reference an algorithmic data point and freely choose to set prices I don’t see how that’s collusion. You've hit the nail on the head. It's the former, which is why it's collusion.
- tyingq 3y ago
  I imagine it's tricky to really prove. Airlines, for example, have been doing somewhat similar things for decades, but there's no simplistic path to showing collusion.
  - ghaff 3y ago
    Pretty much all companies, especially large ones, rely on a series of intermediary sources for things like pricing, salaries, etc. They're not constrained by those sources for individual products, services, and people but they're absolutely aware of them. And it's probably a fairly short distance from there to "We're not going to pay you more than an equivalent level at Google" whether or not that's explicitly stated.
  - willis936 3y ago
    Funny you mention that. One of RealPage's architects has experience in making cartels in the airline industry, and getting caught. The trick to getting caught here is to be very blatant and just pretend the law doesn't exist. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... >A genial, self-described “numbers nerd,” Jeffrey Roper was Alaska Airlines’ director of revenue management when it and other major airlines began developing price-setting software in the 1980s. >Competing airlines began using common software to share planned routes and prices with each other before they became public. The technology helped head off price wars that would have lowered ticket prices, the Department of Justice said. >The department said the arrangement may have artificially inflated airfares, estimating the cost to consumers at more than a billion dollars between 1988 and 1992. The government eventually reached settlements or consent decrees for price fixing with eight airlines, including Alaska Airlines, all of which agreed to change how they used the technology.
- ilikehurdles 3y ago
  But based on the post, this really seems to not be the case? "Price deviations don’t immunize conspirators. Some things in life might require perfection, but price-fixing arrangements aren’t one of them. Just because a software recommends rather than determines a price doesn’t mean it’s legal. Setting initial starting prices or recommending initial starting prices can be illegal, even if conspirators deviate from recommended prices." Would be better to see an argument from the FTC grounded in evidence and analysis, because I don't get what this is based on. Software recommends a price, sure, but so does any appraisal in any industry. For how long can I use an appraisal service before the FTC says I'm committing a crime? I just feel like the lines are not drawn very clearly with this argument. Aside, if anyone from the FTC is here right now, for God's sake do not use "IRL" in official writing.
  - rahimnathwani 3y ago
    But based on the post, this really seems to not be the case? I don't understand how you came to that conclusion. From the post: an agreement to use shared pricing recommendations, lists, calculations, or algorithms can still be unlawful even where co-conspirators retain some pricing discretion or cheat on the agreement. Also from the post: The agencies filed a joint legal brief explaining... From that legal brief (emphasis mine): ... when competitors *agree to fix* end prices, ... *the agreement* is the violation, and unsuccessful price-fixing schemes are as unlawful as successful ones. Another commenter asked how this is different from car dealers using the KBB values. If a deal uses KBB values to inform themselves of the approximate value of a car, before deciding their opening bid/offer in a negotiation, that's fine. If they agree with a neighbouring dealer that they'll always start their negotiation with the KBB price, this is illegal price fixing. From the brief: In Plymouth Dealers’ Association, 279 F.2d 128, for instance, a defendant convicted of price fixing for agreeing with competing dealers on a “fixed uniform list price” for Plymouth cars argued that the conviction could not be upheld because the government’s case required “proof of something more—that [the uniform list price] was adhered to; that it was utilized to fix prices; or that it did actually fix prices.” Id. at 130. The Ninth Circuit rejected this argument, stating that “the fact that the dealers used the fixed uniform list price in most instances only as a starting point[] is of no consequence.” Pages 23-24 (PageID #6982 and PageID #6983) of the PDF explain how the collusion was orchestrated: https://www.ftc.gov/system/files/ftc_gov/pdf/YardiSOI-filed%28withattachments%29_0.pdf https://www.ftc.gov/system/files/ftc_gov/pdf/YardiSOI-filed%...
Rapzid 3y ago
> some pricing discretion That's the key. The problem is the agreement; that results in price fixing. Even if someone is allowed "some pricing discretion"(ie maybe they can deviate 8%) it can still be illegal. Maintaining full pricing discretion is what referencing KBB on your own and making a determination outside a pricing agreement would be; not illegal. From what I can tell. Not legal advice.

rahimnathwani 3y ago

If multiple seller/landlord parties all agree to have a single algorithm set prices I understand the FTC’s point. If however they all reference an algorithmic data point and freely choose to set prices I don’t see how that’s collusion. You've hit the nail on the head. It's the former, which is why it's collusion.

tyingq 3y ago
I imagine it's tricky to really prove. Airlines, for example, have been doing somewhat similar things for decades, but there's no simplistic path to showing collusion.
- ghaff 3y ago
  Pretty much all companies, especially large ones, rely on a series of intermediary sources for things like pricing, salaries, etc. They're not constrained by those sources for individual products, services, and people but they're absolutely aware of them. And it's probably a fairly short distance from there to "We're not going to pay you more than an equivalent level at Google" whether or not that's explicitly stated.
- willis936 3y ago
  Funny you mention that. One of RealPage's architects has experience in making cartels in the airline industry, and getting caught. The trick to getting caught here is to be very blatant and just pretend the law doesn't exist. https://www.propublica.org/article/yieldstar-rent-increase-realpage-rent https://www.propublica.org/article/yieldstar-rent-increase-r... >A genial, self-described “numbers nerd,” Jeffrey Roper was Alaska Airlines’ director of revenue management when it and other major airlines began developing price-setting software in the 1980s. >Competing airlines began using common software to share planned routes and prices with each other before they became public. The technology helped head off price wars that would have lowered ticket prices, the Department of Justice said. >The department said the arrangement may have artificially inflated airfares, estimating the cost to consumers at more than a billion dollars between 1988 and 1992. The government eventually reached settlements or consent decrees for price fixing with eight airlines, including Alaska Airlines, all of which agreed to change how they used the technology.
ilikehurdles 3y ago
But based on the post, this really seems to not be the case? "Price deviations don’t immunize conspirators. Some things in life might require perfection, but price-fixing arrangements aren’t one of them. Just because a software recommends rather than determines a price doesn’t mean it’s legal. Setting initial starting prices or recommending initial starting prices can be illegal, even if conspirators deviate from recommended prices." Would be better to see an argument from the FTC grounded in evidence and analysis, because I don't get what this is based on. Software recommends a price, sure, but so does any appraisal in any industry. For how long can I use an appraisal service before the FTC says I'm committing a crime? I just feel like the lines are not drawn very clearly with this argument. Aside, if anyone from the FTC is here right now, for God's sake do not use "IRL" in official writing.
- rahimnathwani 3y ago
  But based on the post, this really seems to not be the case? I don't understand how you came to that conclusion. From the post: an agreement to use shared pricing recommendations, lists, calculations, or algorithms can still be unlawful even where co-conspirators retain some pricing discretion or cheat on the agreement. Also from the post: The agencies filed a joint legal brief explaining... From that legal brief (emphasis mine): ... when competitors *agree to fix* end prices, ... *the agreement* is the violation, and unsuccessful price-fixing schemes are as unlawful as successful ones. Another commenter asked how this is different from car dealers using the KBB values. If a deal uses KBB values to inform themselves of the approximate value of a car, before deciding their opening bid/offer in a negotiation, that's fine. If they agree with a neighbouring dealer that they'll always start their negotiation with the KBB price, this is illegal price fixing. From the brief: In Plymouth Dealers’ Association, 279 F.2d 128, for instance, a defendant convicted of price fixing for agreeing with competing dealers on a “fixed uniform list price” for Plymouth cars argued that the conviction could not be upheld because the government’s case required “proof of something more—that [the uniform list price] was adhered to; that it was utilized to fix prices; or that it did actually fix prices.” Id. at 130. The Ninth Circuit rejected this argument, stating that “the fact that the dealers used the fixed uniform list price in most instances only as a starting point[] is of no consequence.” Pages 23-24 (PageID #6982 and PageID #6983) of the PDF explain how the collusion was orchestrated: https://www.ftc.gov/system/files/ftc_gov/pdf/YardiSOI-filed%28withattachments%29_0.pdf https://www.ftc.gov/system/files/ftc_gov/pdf/YardiSOI-filed%...

Rapzid 3y ago

> some pricing discretion That's the key. The problem is the agreement; that results in price fixing. Even if someone is allowed "some pricing discretion"(ie maybe they can deviate 8%) it can still be illegal. Maintaining full pricing discretion is what referencing KBB on your own and making a determination outside a pricing agreement would be; not illegal. From what I can tell. Not legal advice.