Last week, the FTV, along with 17 states, sued Amazon for “illegally maintaining monopoly power.” The thrust of the complaint is that the online retail giant has used their size to unfairly take advantage of sellers and consumers. A large part of the suit is about how Amazon effectively punished suppliers if they didn’t advertise with them, use their fulfillment services, or sell goods for a lower price elsewhere. Court documents recently came out that show that the prosecution is also arguing that Amazon used a secret algorithm called “Project Nessie” to control seller pricing.
What the FTC is able to prove when it comes to a software’s influence on pricing has a lot of implications for the ongoing lawsuits being brought against RealPage and Yardi. Obviously, this lawsuit is very different than the ones being brought against RealPage or Yardi. Having the FTC and over a dozen state attorney generals filing a suit is not the same as a class action suit. But if the FTC is able to show that an algorithm can inflate prices, it could be used as a blueprint against RealPage and Yardi. Plus, this suit is a gauge of the willingness of the FTC to pursue a similar suit against the PropTechs.
Federal action in response to the claims made by the plaintiffs in the RealPage and Yardi cases is not out of the question. Back in March, a number of Senators, including Bernie Sanders and Elizabeth Warren, wrote a letter to the DOJ expressing their concerns about the role that algorithmic rent-setting software played in setting rental prices. The FTC does seem to be on an anti-trust rampage. They have already filed suits against other software titans like Google and Facebook, so it wouldn’t be shocking if they put the property industry, with its contribution to unaffordable housing, in its sights.