The U.S. Department of Justice (DOJ) has filed a civil antitrust lawsuit against RealPage, alleging that the company’s “algorithmic pricing scheme” undermines competition among landlords and harms renters. The DOJ claims that RealPage contracts with competing landlords who agree to share sensitive information about their rental rates and other lease terms to run the software. The article also notes that YieldStar is being used in Canada, but it is unclear how widespread its usage is among major Canadian landlords.
Key takeaways:
- YieldStar, a controversial AI rental pricing software, is under investigation in Canada due to concerns about price-fixing in the rental market. The software, owned by Texas-based RealPage Inc., generates apartment pricing recommendations for landlords by reviewing market data.
- The U.S. Department of Justice has filed a civil antitrust lawsuit against RealPage, alleging that the company’s “algorithmic pricing scheme” undermines competition among landlords and harms renters. The software is accused of perpetuating anti-competitive behaviour and driving up prices for tenants.
- YieldStar is also being used in Canada, but it's unclear how common it is among major Canadian landlords. The software's presence in Canada could exacerbate the country's housing crisis, as it could potentially lead to higher prices and increased vacancy rates.
- Algorithmic pricing is not new in Canada and is common in industries with variable demand. However, in the rental industry, the issue is more about anti-competitive behaviour. The impact of the DOJ’s lawsuit against RealPage could be significant and instructive to other industries using similar pricing software.