Hacker News Reader

Comment by r0m4n0 | Hacker News Reader

I’m curious what RealPage gets out of all this. Based upon the alleged activities it sounds like price fixing to the layperson but why? Realpage should just be concerned with keeping their saas customers by making a good product. Coordinating this conspiracy sounds like a lot of work for little gain of a software company.

As someone who has been the target of an overzealous law enforcement investigation, these investigators love to come up with a larger conspiracy to fit their narrative.

It could just be too many properties are owned by a few people and they have too much pricing control over entire regional markets… too bad we don’t have a choice but to pay when you need somewhere to live.

I suppose all we can do is speculate until the evidence is shown.

View on HN

> Realpage should just be concerned with keeping their saas customers by making a good product

The coordination is the service. Realpage is literally offering CaaS (cartel as a service). The "market insight" would be nearly valueless without the guarantee that Realpage was signing contacts with your competitors that prevents them from undercutting your prices (and vice versa).

As a landlord, you want to know what to price your rental so it rents relatively quickly. You need to know the "fair market rent" for the unit.

If you're familiar with the area, do your research, and have some experience, you can get a number pretty quickly.

RealPage offered to do that work for you - but once they are doing for a certain percentage of the market in an area, they become controlling of that market, and you can get "harmonic errors" that don't get corrected, because they control too much of the supply pricing.

it is not "harmonic errors" thats don't get corrected. Rather, it is willful collusion, knowing you can follow Realpage's recommended price and you are comfortably assured you won't be undercut, because your should-be competition is doing the same.

They essentially turn what should be a competitive market to a monopoly via collusion.

I share your skepticism. The fact that there's so much blame being put on the algorithm is very strange to me. Why shouldn't landlords have access to that data? I think that the case for somehow limiting the algorithm is quite weak. However, if what the complaint says about the advisors is true, then I think that is a much stronger case.

>Coordinating this conspiracy sounds like a lot of work for little gain of a software company.

Presumably, RealPage can sell its services for a far higher price with the conspiracy than without. It doesn’t take a genius to periodically poll competing landlord’s rental prices, either via telephone or internet search.

What does take a genius is to deliver the benefits of being a cartel and also deliver plausible deniability to avoid legal/punitive costs.

> Realpage should just be concerned with keeping their saas customers by making a good product.

That's not how late stage capitalism works. Quite often it's closer to winner take all.

Think about it this way, you need to buy a piece of management software that costs $1000 per month (or $10,000 whatever, just a healthy chunk of your revenue). They both do the job well enough so they aren't completing on capability. Now imagine one of them earns you 25% more by using it. Well, everyone that rents is going to be interested in that sales pitch. Capitalists like more money for the same expenses.

Reply on news.ycombinator.com