Price Fixing Is Price Fixing with or without AI

June 3, 2024

This essay is the work of a dinobaby. Unlike some folks, no smart software improved my native ineptness.

Small time landlords, such as mom and pops who invested in property for retirement, shouldn’t be compared to large, corporate landlords. The corporate landlords, however, give them all a bad name. Why? Because of actions like price fixing. ProPublicia details how politicians are fighting against the bad act: “We Found That Landlords Could Be Using Algorithms To Fix Rent Prices. Now Lawmakers Want To make The Practice Illegal.”

RealPage sells software programmed with AI algorithm that collect rent data and recommends how much landlords should charge. Lawmakers want to ban AI-base price fixing so landlords won’t become cartels that coordinate pricing. RealPage and its allies defend the software while lawmakers introduced a bill to ban it.

The FTC also states that AI-based real estate software has problems: “Price Fixing By Algorithm Is Still Price Fixing.” The FTC isn’t against technology. They’re against technology being used as a tool to cheat consumers:

“Meanwhile, landlords increasingly use algorithms to determine their prices, with landlords reportedly using software like “RENTMaximizer” and similar products to determine rents for tens of millions(link is external) of apartments across the country. Efforts to fight collusion are even more critical given private equity-backed consolidation(link is external) among landlords and property management companies. The considerable leverage these firms already have over their renters is only exacerbated by potential algorithmic price collusion. Algorithms that recommend prices to numerous competing landlords threaten to remove renters’ ability to vote with their feet and comparison-shop for the best apartment deal around.”

This is an example of how to use AI for evil. The problem isn’t the tool it’s the humans using it.

Whitney Grace, June 3, 2024

Written by Stephen E. Arnold · Filed Under AI, Legal matters, News

Comments

Got something to say?

Search the site
Subscribe to Beyond Search
Feature archive
News archive

Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.