Big Landlord Settles With US, Will Cooperate In Price-Fixing Investigation (arstechnica.com) 61
An anonymous reader quotes a report from Ars Technica: The US Justice Department today announced it filed an antitrust lawsuit against "six of the nation's largest landlords for participating in algorithmic pricing schemes that harmed renters." One of the landlords, Cortland Management, agreed to a settlement "that requires it to cooperate with the government, stop using its competitors' sensitive data to set rents and stop using the same algorithm as its competitors without a corporate monitor," the DOJ said. The pending settlement requires Cortland to "cooperate fully and truthfully... in any civil investigation or civil litigation the United States brings or has brought" on this subject matter.
The US previously sued RealPage, a software maker accused of helping landlords collectively set prices by giving them access to competitors' nonpublic pricing and occupancy information. The original version of the lawsuit described actions by landlords but did not name any as defendants. The Justice Department filed an amended complaint (PDF) today in order to add the landlords as defendants. The landlord defendants are Greystar, LivCor, Camden, Cushman, Willow Bridge, and Cortland, which collectively "operate more than 1.3 million units in 43 states and the District of Columbia," the DOJ said. "The amended complaint alleges that the six landlords actively participated in a scheme to set their rents using each other's competitively sensitive information through common pricing algorithms," the DOJ said. The phrase "price fixing" came up in discussions between landlords, the amended complaint said: "For example, in Minnesota, property managers from Cushman & Wakefield, Greystar, and other landlords regularly discussed competitively sensitive topics, including their future pricing. When a property manager from Greystar remarked that another property manager had declined to fully participate due to 'price fixing laws,' the Cushman & Wakefield property manager replied to Greystar, 'Hmm... Price fixing laws huh? That's a new one! Well, I'm happy to keep sharing so ask away. Hoping we can kick these concessions soon or at least only have you guys be the only ones with big concessions! It's so frustrating to have to offer so much.'"
The Justice Department is joined in the case by the attorneys general of California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington. The case is in US District Court for the Middle District of North Carolina.
Further reading: Are We Entering an AI Price-Fixing Dystopia?
The US previously sued RealPage, a software maker accused of helping landlords collectively set prices by giving them access to competitors' nonpublic pricing and occupancy information. The original version of the lawsuit described actions by landlords but did not name any as defendants. The Justice Department filed an amended complaint (PDF) today in order to add the landlords as defendants. The landlord defendants are Greystar, LivCor, Camden, Cushman, Willow Bridge, and Cortland, which collectively "operate more than 1.3 million units in 43 states and the District of Columbia," the DOJ said. "The amended complaint alleges that the six landlords actively participated in a scheme to set their rents using each other's competitively sensitive information through common pricing algorithms," the DOJ said. The phrase "price fixing" came up in discussions between landlords, the amended complaint said: "For example, in Minnesota, property managers from Cushman & Wakefield, Greystar, and other landlords regularly discussed competitively sensitive topics, including their future pricing. When a property manager from Greystar remarked that another property manager had declined to fully participate due to 'price fixing laws,' the Cushman & Wakefield property manager replied to Greystar, 'Hmm... Price fixing laws huh? That's a new one! Well, I'm happy to keep sharing so ask away. Hoping we can kick these concessions soon or at least only have you guys be the only ones with big concessions! It's so frustrating to have to offer so much.'"
The Justice Department is joined in the case by the attorneys general of California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington. The case is in US District Court for the Middle District of North Carolina.
Further reading: Are We Entering an AI Price-Fixing Dystopia?
Re:this type of price fixing (Score:4, Funny)
According to the lawsuits, it's illegal in the US, too.
Re:this type of price fixing (Score:5, Insightful)
Notionally. The amount of collusion and price fixing in the US that is very obvious to anyone looking, but that goes uninvestigated is hilarious. Ideally one would stay away from national brands, but as this topic shows, there are "nantional brands" behind almost everything. We claim to beleive in capitalism, but we absolutely abhor one of its most fundamental forces: competition.
Re: (Score:3)
I don't think it's fair to say that we abhor competition. That's not really what's going on.
The problem you are referring to is not new, and was even written-about by Adam Smith. It's a problem that simply comes with the territory.
Every producer of goods and services has a direct financial incentive to collude with their competitors. The only force that can stop this is government regulation. No amount of "free market" policies will stop this. It is not true that someone else can simply start competing
Re:this type of price fixing (Score:5, Informative)
Please provide proof this is illegal in the US.
Sure thing. It's called the Sherman Antitrust Act [cornell.edu] and prohibits price fixing of any kind.
The Justice Department has this handy dandy outline [justice.gov] of what to look for in price fixing cases.
And finally, what the FTC has to say on the matter [ftc.gov].
Now come up with, "But it's not in the Constitution!" bullshit.
Re: this type of price fixing (Score:2)
So can a landlord look at competitors ads in the paper and see their rent price and their sense of their competitors occupancy rate and use that information to determine their rental prices?
That seems to be what the software did, but people get upset when what was once a slow, labor intensive effort (reading newspaper ads and talking to people) becomes automated, like when a cop driving around with a list of license plate numbers to look for is turned into a license plate reader on a police cruiser.
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Published rent and actual rent can vary significantly, as can concessions to new tenants and rental increases.
The scale of this is really abusive; the six companies control something in the range of 2-5% of all rental properties in the country. It is unclear how many of the smaller landlords also participated in it, but it was a quite material impact on rental rates.
I am pretty sure there's widespread collusion (Score:2)
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"!That seems to be what the software did,"
No.. the software created a massive upward price spiral
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Looks can be deceiving. The software was cloud based and had access to the private data of all of the client landlords. It did not share that data between clients but it did use that data when suggesting what the client should charge for rent. The software was a virtual version of the proverbial smoke filled room where the supposed bitter competitors get together, have a few beers, a few laughs, and decide how much things are going to cost next month.
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The software had actual data from all landlords.
It had their occupancy rate, their lease renewal rates. The lease renewal vs price increase data.
It then can refine this data across all landlords, then tell them all to charge the same.
The fact that they were all using the same algorithm and the same information (drawn from all software users, not just one) is what made this different than using public knowledge and ones own strategy.
This (Score:2)
Re: (Score:2)
Please provide proof this is illegal in the US.
Sure thing. It's called the Sherman Antitrust Act [cornell.edu] and prohibits price fixing of any kind.
The Justice Department has this handy dandy outline [justice.gov] of what to look for in price fixing cases.
And finally, what the FTC has to say on the matter [ftc.gov].
Now come up with, "But it's not in the Constitution!" bullshit.
Having lived for a spell in some developing (third world) nations, one of my favourite sayings about them is "they have a great legal system but a terrible justice system". Meaning the laws are quite good but they are applied inequitably, if applied at all (functionally, it meant if you were white, never get into legal trouble as the law was against you, so pay the bribe and get out of it rather than throwing yourself upon the "fairness" of the court).
A law that is not enforced or enforced properly and e
Re: (Score:2)
It doesn't have to be a violation of criminal law to be illegal. Antitrust legislation is largely civil law, and penalties are enforced through judges' orders. Violate the order, and now you get criminal penalties: contempt of court.
Re: (Score:3)
Over time, the federal courts have developed a body of law under the Sherman Act making certain types of anticompetitive conduct per se illegal,
The gotcha is in your lack of understanding of the Sherman Act. Which, to be fair, was passed in 1890, and has had so many updates and case law, that you can spend your entire legal career dealing with nothing but Sherman, and still not necessarily know all the ins and outs.
A rough guideline (And I'm not a lawyer, but my grandmother was, and for a time, she was a specialist in anti-trust litigation) is that if it harms large numbers of people, it might be illegal. Except when it isn't. Or it definitely i
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Nope, not the AC.
You left out the sarcasm tags, which existed only in your mind, and made you seem sincere.
They're not my pals, and I didn't say the Sherman Act is too old-- I said it's very old, and there's massive amounts of case law, and follow up laws that have made it incredibly complicated.
You need to focus more on what people actually say, and less on what you think they said.
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It does make you wonder though, I was shopping for a tire the other day and it was the same price, to the dollar at all 6 websites I checked.
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It would be different if all brands of tire were the same (high) price in a given size. One brand controlling its distribution is expected, all brands colluding on price is not.
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Re:this type of price fixing (Score:4, Interesting)
Between 1975 and 1995 the Justice Dept spent 10s of thousands of hours and millions of dollars trying to prove that breakfast cereal companies were setting prices by communicating to each other through codes/steganography embedded in shelf prices and other public documents. Everyone in the grain, cereal, and grocery industries knew they were doing it but AFAIK Justice was never able to prove it.
Re: (Score:1)
Why is having absolute transparency about rental prices considered price fixing?
The stock market lists actual prices that shares are bought and sold at, as well as what the current bids and offers are.
This enables share sellers to know what their competitors are selling at, and likewise lets knows buyers know what the other buyers are bidding, so sellers and buyers can choose to raise or lower their prices to meet the market.
The real estate market should be equally transparent, for both renting and selling
Re: (Score:1)
Why is having absolute transparency about rental prices considered price fixing?
It's not, but good job muddying the shit out of the whole issue with lots of extra words to make yourself sound insightful and make anyone out-of-the-loop on this issue measurably less informed and possibly actually stupider. This isn't about whatever the fuck you're talking about. This is about all the major landlords and rental property companies colluding on pricing in an anti-competitive fashion and attempting to shift the blame and liability for that illegal behavior to a 3rd party company while doing
Re: this type of price fixing (Score:3)
To answer your question, quite simply the difference is the stock market does NOT publish competitively sensitive material non-public information.
They were not just sharing the current prices. They were sharing their plans for future prices, collectively.
Re: (Score:2)
They believed they found a work-around for price-fixing laws and, as the current charges make clear, they were wrong.
I know some people who have been renting for a long time. Many years. In my estimation, they are owed thousands, not to mention hundreds reduced from the rent they currently pay. Given how these things tend to go, they will receive maybe 35 cents in repayment and ten bucks off for one month if they refer a friend.
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If all the landlords use the same algorithm that determines a higher vacancy rate increases the "market" rate enough to increase net income how is that transparency or good?
Good grief. (Score:2)
When a property manager from Greystar remarked that another property manager had declined to fully participate due to 'price fixing laws,' the Cushman & Wakefield property manager replied to Greystar, 'Hmm... Price fixing laws huh? That's a new one! Well, I'm happy to keep sharing so ask away. Hoping we can kick these concessions soon or at least only have you guys be the only ones with big concessions! It's so frustrating to have to offer so much.'"
A property manager that doesn't know about price fixing laws? Or is this just the typical arrogance showing; they know, they just don't particularly care to the point where they ignore it as a reality?
At the very least, the language suggests there's some massive collusion going on among the landlords in the area. So much for capitalism being all about competition.
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Not sure why this is illegal. It is their property, they can charge what they want. Antitrust laws are not constitutional anyway.
And yet, the Supreme Court says otherwise [justia.com]. But it's a good bet you know more than they do on the matter.
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The Supreme Court used to say this. It remains to be seen whether the conflicts-of-interests occupying the chairs at the moment will maintain precedent since they've shown themselves willing to toss it out with little rhyme or reason.
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Not sure why this is illegal. It is their property, they can charge what they want. Antitrust laws are not constitutional anyway.
And yet, the Supreme Court says otherwise [justia.com]. But it's a good bet you know more than they do on the matter.
No/ You (and those old non-technical men in robes) just don't understand.
This is different.
It's On A Computer!
Probably therefore even patentable!
Re: (Score:2)
patentable in the US only.
95% of the world does not recognize any software patents.
Car Repair (Score:2)
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That book just shows the average time to repair a given thing on a given car. The book does not set the Shop's labor rate. You can shop around for a better rate. But it takes time to make repairs in any case.
Any decent mechanic can beat book time. The shop could give you an estimate based on book time but charge you actual time, but probably won't.
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There are fuck tons of shops that charge actual rates and don't even have those shop time averages books. Some shops will charge set prices for certain common items, like oil changes. Usually those prices are well below the book rates.
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Flat-rate billing is standard in the automotive industry. Period.
You really don't want it the other way where they clock your repair order - the mechanic has no incentive to get the job done quickly, so you'll pay more. With flat-rate billing, a good mechanic that can do several major services (4+ hour) in a day can actually make money doing work that costs you less and gets you your work done faster.
If they charge you 10 hours labor for a transmission overhaul and get it done in 8 they get paid for being
Re: (Score:3)
That is theory.
In practice, bad mechanics change unnecessary parts because of half-done diagnostics pointing to the part that is not at fault, and overcharge that way
(firing the Parts Cannon)
Minimalist tiny house neighborhoods (Score:3)
Re: (Score:2)
We already know how to build cheap high density housing with shared resources: Motel 6.
Shared bathrooms are not ideal. Every unit needs its own full bath so people can keep themselves clean.
A bed and a space to work are sufficient. Basically, a one-bedroom apartment minus the kitchen. The kitchen should be a community resource with staff like is done for public schools.
Slums? (Score:2)
Aint nothing going to happen (Score:2, Insightful)
Re: (Score:1)
All of this started because of a democratic administration, massively accelerated under the next democrat, and hit the breaking point under the current democrat.
This sort of thing is ubiquitous (Score:5, Insightful)
This is happening for sure as HR told us it was (Score:2)
The problem with cases like this (Score:2)
Ultimately the DOJ will settle with most of the accused. They'll agree to fines, promise to cooperate and promise not to do it again. None of this will change the situation for renters or lower rental prices; none of the money obtained by the settlements will reach any renters.
This will go away in a few weeks. (Score:2)
Once the cheque clears with the new admin.
Doesn't Fix Anything (Score:2, Insightful)
It should be straight up illegal for businesses to own single family homes, or any property zoned for it.
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Yea, those families will buy the properties themselves, figure out between themselves how to develop said land
Lennar (or whoever) doesn't own the homes once they build the subdivision and sell the homes. (The HOAs in those types of subdivisions are a completely different story, off topic for here.) I don't believe companies like Lennar are what OP is referring to. Their (in my opinion, rightful) concern is private equity firms buying up already built single family homes, generally the cheaper ones, and either renting them out or flipping them. The problem is people with essentially infinite cash competing against p
Re: (Score:2)
Accurate title, is sadly accurate. (Score:2)
Makes it accurate. Corrupt and medieval, but accurate.
RICO hell to them all (Score:2)
Bastards who use technology against fellow humans to squeeze them of undeserved wealth deserve the ultimate fate - loss of freedom in life