The DOJ’s case about rent collusion might have huge implications for high prices.
Today, algorithms rule everything around us. They serve us entertaining, or at least addictive, content on social media. They try to suss out which emails in our overstuffed inboxes might be most important, and which ones are spam. They act as matchmakers for our love lives. Increasingly, though, algorithms have also been deployed by companies, from Amazon to Uber to Wendy’s, to figure out optimal — often higher — prices that can shift automatically based on a firehose of fine-grained data.Including, apparently, your rent.Now, a software company called RealPage is being sued by the Department of Justice for using an algorithm that suggests rent prices to corporate landlords. The DOJ argues that its algorithm has driven rents higher, and constitutes an illegal information sharing scheme. That is, competitors (the landlords) who would otherwise be acting independently, have exchanged “nonpublic, competitively sensitive data” to the detriment of renters who don’t have access to such knowledge.