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This is a strange claim. How is it that software can eliminate the possibility of rent negotiation? A tenant can negotiate, or try to. How does software elimina

This is a strange claim. How is it that software can eliminate the possibility of rent negotiation? A tenant can negotiate, or try to. How does software eliminate the possibility that this will succeed?

dkjaudyeqooe 3y ago
Because the software has set the price and the landlords are using the software's price exclusively. That is why it's price fixing.
- chii 3y ago
  to me, it's not enough to show that the same algorithm or software is deciding the price. It has to be that there's some threat of punishment from the cartel against those who would lower their price from the agreed one. For example, the explicit agreement by the landlord to keep the price at the algorithmicaly calculated one, even so far as to leave vacancy (where as there wouldn't have been a vacancy if the price was lowered).
  - radicality 3y ago
    There is. I forget the number, but the landlords are only allowed to disagree with the software (and give lower rent) only ~10% or so of the time. Otherwise they will be kicked off of the price fixing platform.
    - samatman 3y ago
      Why isn't that clearly stated in the FTC brief? That's a hell of an absence of evidence, under the circumstances. If there's a smoking gun, why leave it out?
cogman10 3y ago
It's the scope and breadth of deployment and the algorithm/business pressures. > RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. This is the key to why it's price fixing. Everyone playing ball and means that the raising rent rates increases everyone's take home even if a few operate with lower occupancy. The software calculates rent rates that make sure occupancy isn't too low to keep everyone in line. It removes bargaining with the promise that "if you play ball, you'll be rich". Tenants can negotiate prices just like you can theoretically haggle with amazon.
- Aunche 3y ago
  > RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. Of course they would discourage them from deviating from Realpage's recommendation. Why are you paying for a software that recommends the most profitable rent if you aren't going to follow it? Realpage doesn't want property managers to complain that the software isn't working when they're ignoring the software's recommendations. I have yet to see any evidence that there are any actual consequences of ignoring the recommendations. I'm assuming that Realpage will always accept payment for their services. This suggests that price fixing is unlikely. In the case of a cartel, members are incentivized to sell more than their quota allows, and you need active enforcement to maintain compliance. See the history of OPEC.
  - FireBeyond 3y ago
    Consequences involve being kicked off the service with no refund for the (significant) fees.
    - Aunche 3y ago
      Where does it say that? If it's something on the contract, you'd think that the FTC would open with that rather than vaguely imply this this happening.
  - tsimionescu 3y ago
    It doesn't matter if there are consequences for not following the illegal price fixing scheme (the recommendation algorithm). The fact that they are creating a price fixing scheme in the first place is illegal. It's the same thing as if I were to call for a meeting of all landlords in my area to discuss rents. Anyone who owns property in the area is invited. At the meeting, I would propose that we all keep rents above 1000$ per room. People would argue and finally there'd be some broad agreement that 900-1100$ dollars per room is a better idea. We don't sign anything and don't imply any repercussions for those who ignore it. Then, 90% of those present would undercut the agreed numbers and offer their rooms for 800$. The end result is that rooms in the area go for 750-900$, so we utterly failed. What everyone present at that meeting did, even those who undercut the agreed prices, is illegal price fixing. Competitors are simply not allowed to discuss and agree on prices in any way. If we replace the meeting with a third party offering a recommendation algorithm that everyone independently follows, knowing that others do the same, nothing materially changes. The algorithm need not be binding, and need not be adopted fully, for this to be illegal to do.
treis 3y ago
This sounds like denying the existence of price fixing altogether. Sure, buyers can try to negotiate against a price fixing scheme but it won't work. The price is fixed. The software isn't really doing anything. It's simply the means of communication by which the prices are fixed amongst the suppliers.
- FireBeyond 3y ago
  > The software isn't really doing anything. It's simply the means of communication by which the prices are fixed amongst the suppliers. The software literally includes the algorithm that says "this week, you will set the rate for this apartment at $X" based on its data. And if you want to deviate from that, without being kicked off, and losing your substantial fee payment, you will do that rate (and they will check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
  - tsimionescu 3y ago
    Even if they didn't kick you off, they would still be engaging in price fixing. They would be worse at actually changing prices with their scheme, but badly executed, ineffective price fixing is still illegal.
  - lupire 3y ago
    Can you link to info on that feature of the software?
koliber 3y ago
It might not remove the possibility of negotiation. If it reduces the likelihood of negotiation, the impact is similar.

dkjaudyeqooe 3y ago

Because the software has set the price and the landlords are using the software's price exclusively. That is why it's price fixing.

chii 3y ago
to me, it's not enough to show that the same algorithm or software is deciding the price. It has to be that there's some threat of punishment from the cartel against those who would lower their price from the agreed one. For example, the explicit agreement by the landlord to keep the price at the algorithmicaly calculated one, even so far as to leave vacancy (where as there wouldn't have been a vacancy if the price was lowered).
- radicality 3y ago
  There is. I forget the number, but the landlords are only allowed to disagree with the software (and give lower rent) only ~10% or so of the time. Otherwise they will be kicked off of the price fixing platform.
  - samatman 3y ago
    Why isn't that clearly stated in the FTC brief? That's a hell of an absence of evidence, under the circumstances. If there's a smoking gun, why leave it out?

cogman10 3y ago

It's the scope and breadth of deployment and the algorithm/business pressures. > RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. This is the key to why it's price fixing. Everyone playing ball and means that the raising rent rates increases everyone's take home even if a few operate with lower occupancy. The software calculates rent rates that make sure occupancy isn't too low to keep everyone in line. It removes bargaining with the promise that "if you play ball, you'll be rich". Tenants can negotiate prices just like you can theoretically haggle with amazon.

Aunche 3y ago
> RealPage discourages bargaining with renters and has even recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money. Of course they would discourage them from deviating from Realpage's recommendation. Why are you paying for a software that recommends the most profitable rent if you aren't going to follow it? Realpage doesn't want property managers to complain that the software isn't working when they're ignoring the software's recommendations. I have yet to see any evidence that there are any actual consequences of ignoring the recommendations. I'm assuming that Realpage will always accept payment for their services. This suggests that price fixing is unlikely. In the case of a cartel, members are incentivized to sell more than their quota allows, and you need active enforcement to maintain compliance. See the history of OPEC.
- FireBeyond 3y ago
  Consequences involve being kicked off the service with no refund for the (significant) fees.
  - Aunche 3y ago
    Where does it say that? If it's something on the contract, you'd think that the FTC would open with that rather than vaguely imply this this happening.
- tsimionescu 3y ago
  It doesn't matter if there are consequences for not following the illegal price fixing scheme (the recommendation algorithm). The fact that they are creating a price fixing scheme in the first place is illegal. It's the same thing as if I were to call for a meeting of all landlords in my area to discuss rents. Anyone who owns property in the area is invited. At the meeting, I would propose that we all keep rents above 1000$ per room. People would argue and finally there'd be some broad agreement that 900-1100$ dollars per room is a better idea. We don't sign anything and don't imply any repercussions for those who ignore it. Then, 90% of those present would undercut the agreed numbers and offer their rooms for 800$. The end result is that rooms in the area go for 750-900$, so we utterly failed. What everyone present at that meeting did, even those who undercut the agreed prices, is illegal price fixing. Competitors are simply not allowed to discuss and agree on prices in any way. If we replace the meeting with a third party offering a recommendation algorithm that everyone independently follows, knowing that others do the same, nothing materially changes. The algorithm need not be binding, and need not be adopted fully, for this to be illegal to do.

treis 3y ago

This sounds like denying the existence of price fixing altogether. Sure, buyers can try to negotiate against a price fixing scheme but it won't work. The price is fixed. The software isn't really doing anything. It's simply the means of communication by which the prices are fixed amongst the suppliers.

FireBeyond 3y ago
> The software isn't really doing anything. It's simply the means of communication by which the prices are fixed amongst the suppliers. The software literally includes the algorithm that says "this week, you will set the rate for this apartment at $X" based on its data. And if you want to deviate from that, without being kicked off, and losing your substantial fee payment, you will do that rate (and they will check), or you can "request an override" from RealPage, that they may allow or deny at their discretion (and RP agents are formally trained that override approvals may not exceed 5% of requests).
- tsimionescu 3y ago
  Even if they didn't kick you off, they would still be engaging in price fixing. They would be worse at actually changing prices with their scheme, but badly executed, ineffective price fixing is still illegal.
- lupire 3y ago
  Can you link to info on that feature of the software?

koliber 3y ago

It might not remove the possibility of negotiation. If it reduces the likelihood of negotiation, the impact is similar.