Is that "price collusion" though? How's that different than if you're selling stuff on cragislist/facebook marketplace/ebay, and you set your price by looking what other listings are?
RealPage made it so that landlords were less competitive and more cooperative. Landlords would share proprietary information and then RealPage would help them all set prices collectively. It's just old fashioned price fixing with a SaaS and an algorithm.
So the difference is using pricing info to beat your competitors vs using pricing info to collude with your competitors.
The way competitors legally message each other to suggest a price increase is via the prices themselves.
E.g. an airline wants to raise the price of a ticket from New York to Los Angeles from $500 to $530 -- and they secretly want the other airlines to follow them and raise their prices too.
1) The airline submits the price increase to the global travel reservation system that all airlines can see. All the other airlines have computers constantly monitoring all the other airlines' ticket prices and can instantly adjust prices in response.
2) The airline that wants the price increase waits to see how the other airlines respond. Either (1) the competitor airlines keeps their lower prices to "take market share" -- or -- (2) they also raise their prices to match which "maintains status quo of market share" but all competitors get to take advantage of charging the higher price
3) If the other airlines don't match the higher price, the airline that "proposed" the higher price then rolls it back to $500. All this can happen within a few hours.
That's the way competitors "collude" to raise prices out in the open. The publicly visible prices are the messaging system. The loophole here is that the changing prices must be visible because the potential passengers buying the tickets need to see them too.
The above scenario has been studied by various papers and the government. The prices simultaneously act as both a "cost to buy" and as a "message to cooperate".
Legal "collusion" via price signals is easier in concentrated industries with few competitors (e.g. airlines). It's harder for fragmented markets or markets with hundreds-to-thousands of competitors. E.g. a barbershop wanting to raise the price of haircuts by $5 isn't going to get the hundred other barbershops to also raise their prices by $5.
Yea I mean. A simple watch of movie film "A bueaitful Mind" starring John Nash as math genius russel crowe. Crowe equilibrium or whatever it's called. That scene where the nerds were in the bar trying to get the girl. his friends said let the best man win and crowe said - no - only way to win is we collude. and then they won. Now imagine that -- but it's not russel crowe, it's united airlines.
I mean if you look at companies from that crowe equilibruim perspective and treat them as sophisticated and rational.. one would expect most everything to be rigged!
Companies making individual decisions about pricing is legal.
Companies asking an external source (e.g. a consulting company) to help with pricing is legal.
Companies sharing nonpublic data with their competitors and setting prices collectively as a group is illegal.
The entire reason for Realpage's existence is to facilitate #3.
Literally from the linked DoJ press release
> RealPage’s revenue management software has relied on nonpublic, competitively sensitive information shared by landlords to set rental prices. RealPage’s software has also included features designed to limit rental price decreases and otherwise align pricing among competitors.
I'm not sticking up for Realpage; I don't know enough about how it works.
And, if you want to deviate from that, without being kicked off RP and losing your substantial fee payments, you will do follow that rate (and they tell you that 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).
> Consistent with their agreement to impose rents generated by RealPage RM Software nearly all the time, Defendants agreed to limit overrides. For example, a RealPage LRO training document states: “Overrides should be few and far between.” Similarly, internal RealPage LRO training documents teach cartel members’ regional managers to beware of “Override Overload” or “rogue” leasing agents who too frequently override the LRO-generated pricing.
> An internal presentation created by Defendant Greystar explicitly acknowledges that RealPage RM Software users should each seek to accept at least 95% of the RealPage-generated prices, emphasizing that “Discipline [o]f using revenue management increases more consistent outcomes.”
> Former Greystar employees have similarly confirmed that negotiating rents other than those set by the RealPage RM Software was unacceptable.
> Even where Participating Landlords do not enable auto-accept, most landlords cannot, on their own, charge rents other than those generated by RealPage’s RM Software— landlords can only “propose an override.” The landlord must then provide a written business justification for why they wish to depart from the RealPage-generated rent.
1. How is this any different than other sorts of transactions that occur on a recurring basis? For instance dog walking services or personal trainers? Such vendors are also presumably pricing their services based on what everyone else's pricing is, but any subsequent price changes aren't public.
2. Under current competition law, whether something is an "open market" is irrelevant to whether a given pricing strategy is illegal or not. Collusion doesn't magically become legal because it's done on the open market.