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Is Price Fixing Protected by the First Amendment? 

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We’ve been tracking the story of RealPage—a purported rental management software company owned by private equity giant Thoma Bravo that in reality acts as a rent-fixing middleman for property giants across the country—for some time, and it’s unfortunately time for another update.

RealPage was already a trailblazer in collusion and cartel behavior, worsening the lives of Americans seeking shelter. In metropolitan areas across the country—and potentially the world—it helped mega landlords collude on rent prices and contributed to them going through the roof.

It likely played a major role in the worsening homeless crisis in American cities over recent years. And it is now front and center in setting a dangerous new precedent in a free speech defense of corporate law breaking.

Back in April, RealPage announced that it has filed a lawsuit against the City of Berkeley, California for passing an ordinance barring local landlords from using AI-driven pricing algorithms to set residential rents.

RealPage claims Berkeley seeks to “prohibit the use of math” and publicly available information to “provide advice or recommendations” to its customers who own and manage rental housing properties and this amounts to a ban on “lawful speech.”

We covered some of RealPage’s other arguments in the suit here, but the company’s ability to make such free speech defense without being laughed out of the courtroom is part of the ongoing fallout from the 2010 Supreme Court travesty Citizens United v. FEC that extended First Amendment protections to corporations.

And the Berkeley City Attorney Farimah Faiz Brown actually needs to take the time—and money— to defend the city against such nonsense, telling Reuters the following:

“RealPage has no First Amendment right to engage in, or facilitate, unlawful pricing alignment, coordination or fixing,” Brown said via email, adding that the city, represented by Keker, Van Nest & Peters, “intends to vigorously oppose RealPage’s lawsuit.”

That’s surely not cheap and is likely part of the reason other cities and states are now getting cold feet in going after RealPage practices. As the Open Markets Institute notes:

RealPage’s new legal offensive already appears to be having a chilling effect on other local and state governments. Two weeks after RealPage filed its suit against Berkeley, the city council in Portland, Oregon, decided against passing a similar ordinance to ban the use of rent-setting algorithms, citing the Berkeley suit as a reason to send the ordinance back to committee.

…Following Portland’s retreat, Colorado governor Jared Polis vetoed a bill that would have established the first statewide ban on the use of rent-setting algorithms. Citing the ongoing litigation, Polis said he would like to see how the case plays out. 

Trump DOJ Gives Greenlight to Algorithmic Price Setting for the Right Price?

Last week, Greystar, the nation’s largest landlord, kind of agreed to stop using price-fixing algorithmic rent-setting software. As part of a proposed settlement with the DOJ to resolve claims that the company colluded with other landlords to raise rents in cities across the country, Greystar will not admit any wrongdoing not pay even a token fine, but would be required to:

  • Refrain from using any anticompetitive algorithm that generates pricing recommendations using its competitors’ competitively sensitive data or that incorporates certain anticompetitive features;
  • Refrain from sharing competitively sensitive information with competitors;
  • Accept a court-appointed monitor if it uses a third-party pricing algorithm that is not certified pursuant to the terms of the consent decree;
  • Refrain from attending or participating in RealPage-hosted meetings of competing landlords; and
  • Cooperate with the United States’ monopolization claims against RealPage.

But there are some interesting caveats. From Mintz:

Importantly, the Final Judgment does not prohibit Greystar’s use of algorithmic pricing but rather sets conditions Greystar must meet and certify prior to that use – in some cases. For example, if Greystar uses a RealPage revenue management product after the court enters a final judgement in the RealPage case, no certification is required.

So, much would seem to depend on the DOJ and eight states civil lawsuit accusing RealPage of using the software it sells to real estate management companies to orchestrate an illegal price-fixing scheme.

What do we know on that front? The case hasn’t been killed outright, but if we read the tea leaves, it’s not all that encouraging. Here’s an important WSJ story from Aug. 6, “MAGA Antitrust Agenda Under Siege by Lobbyists Close to Trump.” It describes how big money is buying get out of jail cards on antitrust violations. The lede:

The second Trump administration seemed poised to deliver on MAGA’s embrace of aggressive antitrust enforcement. Instead, those efforts have run headlong into power brokers with close ties to President Trump who have snatched up lucrative assignments helping companies facing antitrust threats.

On the internal tug of war being won by the vultures:

Gail Slater, the department’s top antitrust enforcer, has pushed back on the infusion of lobbyists into her world, but appears under siege by Trump loyalists inside and outside of the administration. Slater, who was picked by Trump for the role, saw her two top deputies fired last week after they challenged the terms of the favorable settlement that HPE negotiated with officials in Attorney General Pam Bondi’s office.

Slater and the two fired deputies had objected to HPE’s use of Davis and other politically connected lawyers to negotiate the settlement, people familiar with the matter said. Those comments got back to Davis and others, prompting them to complain about her leadership. Senior officials including Chad Mizelle, Bondi’s chief of staff, and Stanley Woodward, who is nominated to be the associate attorney general, are likely to play a bigger role in overseeing Slater’s division moving forward, some of the people said. 

And finally, how this applies to the RealPage case:

Other companies facing antitrust investigations are now looking to hire lawyers or lobbyists close to Trump after witnessing the favorable settlement that HPE reached, according to several defense lawyers who regularly represent merging companies before the Justice Department.

…Thoma Bravo, a private-equity manager that owns a company facing several antitrust lawsuits, also hired [Brian Ballard—a longtime Trump backer, who raised $50 million for his 2024 election] in March to lobby on competition issues related to the real-estate market, according to filings. The department last year sued Real Page, a Thoma Bravo portfolio company, alleging that RealPage’s rent-setting software allowed apartment landlords to illegally coordinate price increases.

The Trump DOJ has also declared open season for various forms of white-collar crime, such as foreign bribery, public corruption, money laundering and crypto markets. And US Attorney General and corporate lobbyist and foreclosure fraudster Pam Bondi is leading a house cleaning operation at the Justice Department, getting rid of or sidelining career supervisors who were responsible for going after corruption, price fixing, securities fraud, and other crimes.

Some legal analysts believe the Trump DOJ doesn’t care about algorithmic pricing schemes but might block some large-scale mergers. That doesn’t make a whole lot of sense if you spend two seconds thinking about it. Even if you prevent concentration on the surface, widespread adoption of price-fixing technologies between actors does not make for a competitive market.

Should RealPage get a slap on the wrist and its price-fixing behavior allowed to continue, here’s a reminder of what that means: Last year, the White House Council of Economic Advisers estimated that RealPage’s system resulted in renters across the country paying an extra $3.8 billion in 2023 alone.

RealPage Expands Into Surveillance Pricing and Rent Collection

As RealPage goes on offense in Berkeley, and the Trump Justice Department considers the price the make the federal case against the company go away, RealPage is also entering the surveillance pricing game with plans to acquire Livble, a service that lets people pay their monthly rent in installments. More from The Verge:

Livble describes itself as a “flexible” rent payment solution. Renters can split payments into up to four installments throughout the month. The service bills itself as helping tenants “avoid late fees and credit card fees” as well as “build credit through rent,” but it charges $30 to $40 per loan…Under the deal, RealPage will integrate Livble into its property management software and will handle “all collections.”

But that’s not all Livble does.

So really RealPage is just enhancing its ability to help mega landlords squeeze every last cent from renters and discard, i.e., evict them, once they’ve been bled dry.

How About the Fightin’ Democrats?

It’s hard to say anything good about a senile old genocidaire like Joe Biden, but his administration did have Lina Khan at the Federal Trade Commission and Jonathan Kanter at the DOJ Antitrust Division. And for the first time in decades those agencies actually challenged the plutocrats’ project to cement serfdom in the 21st century.

The billionaire backlash against such efforts to make life just a little less precarious was swift and continues to this day.

One day a few weeks back perfectly summed up the divide. Lina Khan penned an op ed in the New York Times, arguing that Democrats must go after practices from outfits like RealPage:

During the New Deal, small businesses were a key part of Democrats’ coalition, with President Franklin Rooseveltchampioning “economic freedom for the wage earner and the farmer and the small-business man.”

The government gave workers greater rights and protections and checked the power of big business in banking, retailing and agriculture. Placing checks on big business while ensuring fair opportunity for labor and small business was recognized as a pathfor ensuring dignified work and growing the middle class.

Since President Bill Clinton, however, the mainstream of the Democratic Party has too often treated small business as little more than a talking point.

At the same time, chief billionaire crybaby—and party to five separate inquiries—during Khan’s time at the FTC, was on Joe Lonsdale championing “Abundance.” Do we see what’s going on here?

Abundance, for the uninitiated, is the latest Democrat effort to make nice with the billionaires while also appearing to offer solutions to Americans’ ever worsening quality of life.

The “Abundance” book was penned by the liberal duo of Ezra Klein and Derek Thompson, and in this time of genocide, accelerating climate catastrophe, and Trump shock therapy, it zeroes in on zoning laws and environmental regulations as central problems to our society today. Less red tape, they argue, will mean that private capital will finally be free to deliver everything you need and want—housing, climate-friendly infrastructure, and loads of other stuff. If that sounds a lot like the neoliberal argument for the past 50 years that has only delivered misery for the masses and astronomical wealth increases for the billionaires, well, that’s the point.

The book has become the guiding light for the Democrat establishment and the Build America Caucus, which is working hand in glove with the Trump wrecking ball.

Even the Obamamometer has gauged which way the wind is blowing and has issued his verdict: Abundance it is!

We recently covered why Abundance is nothing more than usual Democrat PR spin on Silicon Valley crazy Accelerationism, but RealPage offers a crystal clear reminder of why a philosophy preaching that what voters need isn’t a government that ensures they have a living wage, healthcare, shelter, and a liveable planet, but that the market will provide those necessities as long as enough red tape is cut is complete and utter nonsense:

Of course if we were to outlaw RealPage software, it could lead to a collapse of one of the economy’s many house of cards wings. As Moe Takacik pointed out last year, RealPage has also had an outsize role in inflating another toxic property bubble:

For now academia, the media, and finance are still eager to work with RealPage’s founder and invest in Thoma Bravo, which acquired RealPage in 2021, according to the Private Equity Stakeholder Project.

Despite the lawsuits against RealPage, more than 30 US public employee pension funds have invested a total of almost $4 billion in Bravo’s Fund XIV, the fund that acquired RealPage. These pension funds include the California Public Employees Retirement System, New York State Common Retirement Fund, and the Washington State Investment Board. The University of Texas Investment Management Company (UTIMCO) has been a large investor in Thoma Bravo, making six separate commitments into the company totaling $425 million. These commitments included a $125 million commitment to Bravo’s Fund XIV, (the fund which acquired RealPage in 2021). The University of Texas at Austin is also collaborating with Steve Winn, the founder of RealPage, to develop $200 million sustainable research facilities. Winn claims that Texas has “a fragile ecosystem that we need to protect,” and states that preserving the “land and the water for future generations of Texans is important.” However, The Real Deal notes that the facilities would be adjacent to Winn’s Mirasol Springs, a 1,400 acre development that has been the subject of concerns about ecological harm. The collaboration appears to be an opportunity for some positive press for the billionaire.

How fitting.

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3 comments

  1. DJG, Reality Czar

    Freedom of speech. There’s so much freedom for Americans that they can barely withstand the onslaught of such freedoms.

    I see a lineage:
    –Recall that Amazon arose through predatory pricing, which is what the suit with the big publishers was about. The government decided that what benefited the freedom of consumers (not citizens) is the predatory pricing, which extends to the burdensome fees and conditions that Amazon places on its “resellers” — shops.
    –Recall that Uber is all about the freedom to engage oneself in a company that doesn’t want to pay, that has algorithms to pay drivers differently, and that has as its prime directive getting rid of the regulation of taxis and other conveyances.
    –I was reminded, too, how much U.S. life at the local level is dominated by real-estate developers. They run the smaller cities and towns. Is Trump truly that much of an outlier?

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  2. DJG, Reality Czar

    Obama has a number of flaws. (He dresses like an undertaker.)

    But an overdeveloped sense of irony is not one of Obama’s flaws. Noting Ezra Klein quoting Obama’s bloviations on abundance and real estate:
    –From a president whose presidential ziggurat won’t contain his papers but will sponsor a golf course, based on a project that required confiscating land from the Chicago Park District (which is *not done* in Chicago) and based on a team of eager assistants who pretty much refused to engage with the neighborhood residents and neighborhood organization. NIMBY, my ass.
    –Who miraculously, saving pennies from his salary as a Perfesser of Constitutional Law as well as Michelle’s job at the U of Chicago Hospitals, has managed to accumulate four houses. The renovations at the house in Honolulu likely skirted local regulations on use of the beach and beach access, but any questioning would have been NIMBY, natch.

    Let freedom reign throughout the land!

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  3. Adam1

    I can sort of buy into the argument that you can’t ban the use of math and publicly available information on the grounds of free speech; however, the criminal activity is not in the math but in the collusion to fix prices.

    If free speech allows for the fixing of prices and is therefore legal under free speech, then how is any conspiratory behavior illegal. Would that not mean that if more than 1 person uses public information to collude with another to commit murder that then the murder is protected free speech? Would not a conspiracy to assassinate the president be protected free speech under that logic?

    Reply ↓

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