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RealPage Antitrust Suit Could Be Legal Test For AI-Driven Collusion

 |  December 11, 2023

A proposed class action has been initiated against an alleged cartel among apartment landlords, raising crucial questions about the potential illegality of the collective use of artificial intelligence tools and underscoring the intersection of technology and antitrust regulations, bringing to light the implications of relying on algorithmic databases for price-setting in the housing market, according to Bloomberg.

Renter plaintiffs are spearheading the class action, asserting that dozens of landlords delegated price-setting authority to RealPage Inc., a Texas-based revenue-management software company. RealPage’s AI-powered tool analyzes comprehensive data provided by landlords, including information on pricing and leasing for apartments. Subsequently, the tool calculates optimal rental prices for units in a specific geographic area.

At the heart of the matter is the question of whether the collective use of artificial intelligence tools by landlords constitutes illegal collusion. This case is expected to provide legal insights into how decades-old antitrust laws can be applied to suits involving algorithmic databases that process vast amounts of competitive information at speeds far beyond human capability.

Read more: FTC Investigating OpenAI Over Data Security

The lawsuit is set to examine whether the use of advanced AI systems for price-fixing violates antitrust regulations, challenging traditional legal frameworks that were not originally designed to address the nuances of algorithm-driven decision-making.

As companies across various industries increasingly adopt AI-powered information systems, regulators and lawmakers find themselves grappling with the potential risks associated with this rapidly evolving technology. The case against RealPage Inc. highlights the need for a nuanced understanding of how antitrust laws can adapt to address the unique challenges posed by algorithmic decision-making and data-driven pricing structures.

If the plaintiffs succeed in proving that the use of RealPage’s AI tool amounts to an illegal cartel among landlords, the implications for the housing market could be far-reaching. Such a ruling could set a precedent for future cases involving AI-driven collusion, influencing how regulators approach antitrust enforcement in the era of advanced technologies.

This lawsuit adds momentum to the broader debate on regulating artificial intelligence, emphasizing the urgency for lawmakers and regulators to stay ahead of technological advancements. As businesses continue to integrate AI into their operations, ensuring a fair and competitive marketplace becomes paramount, necessitating a reevaluation of existing legal frameworks.

In a world where algorithms wield significant influence, this case serves as a litmus test for the adaptability of antitrust laws to the challenges posed by AI-driven decision-making, setting the stage for a potential shift in how legal systems approach collusion in the digital age.

Source: News Bloomberg Law