Senate Democrats introduce bill to regulate algorithmic rent-setting
Senate Democrats introduced legislation to prevent companies from using algorithms to coordinate rental prices, following a Department of Justice lawsuit against RealPage and several landlords alleging collusive price-fixing. The bill targets companies that collect rental market data and use algorithms to set rents, with studies showing algorithms added billions to nationwide rental costs.
What happened
Senate Democrats introduced legislation targeting companies that collect rental market data from landlords and use algorithms to set rents. Landlords input nonpublic rental information into RealPage software and receive pricing recommendations that allegedly enable them to coordinate rents across competing properties.
Reported impact
A Biden administration Council of Economic Advisers report found that algorithmic pricing added over $90 a month to average rents in Phoenix, Las Vegas, San Diego, Tampa and Washington, D.C., and over $130 a month in Dallas, Denver and Atlanta. In 2023, algorithmic pricing added $3.8 billion to nationwide rental costs.
Index analysis
Senator Amy Klobuchar described the practice as a 'high-tech' version of collusion, comparing it to competitors illegally agreeing to set prices. The Justice Department lawsuit alleges RealPage engaged in a collusion scheme with landlords resulting in higher rents across the country.
Governance controls
The proposed bill would ban companies from using nonpublic competitive information, presume a price-fixing agreement, and require disclosure when algorithms are used to set prices. The bill does not prevent landlords from using algorithms but aims to stop illegal coordination.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.