Albrt had an informative piece cross posted here at NC yesterday focusing on ways to measure whether Trump is improving the alignment of the Republican party with the working class or selling out his supporters and continuing uniparty rule for the oligarchs. Albrt focuses on the policy areas of immigration, tariffs and manufacturing, energy, firing (certain) federal workers, drugs, and alternatives to the college path.
One that should be added to the list is antitrust policy, namely will Trump continue the Biden administration’s efforts to rein in so-called “information sharing”?
Oddly, Biden officials outside of the Department of Justice Antitrust Division and the Lina Khan-led Federal Trade Commission rarely ever talked about it, and the Kamala campaign certainly didn’t campaign on it.
Front and center in the information sharing arena is a big case against RealPage. The DOJ and eight states on August 23 sued the private equity-owned company that allegedly operates as the middle man in a national property management cartel that has sent rent through the roof. The civil lawsuit accuses RealPage of using the software it sells to real estate management companies to orchestrate an illegal price-fixing scheme, which all but eliminates competition among mega landlords, allows them to boost prices, and acted as a major factor in skyrocketing rents in recent years.
RealPage and the rental management companies, many of which are private equity-owned, are also facing dozens of class action lawsuits from tenants. A separate lawsuit against Santa Barbara-based Yardi, a company similar to RealPage, accuses it of using its RENTmaximizer (now Revenue IQ) product to do exactly what RealPage is accused of doing.The DOJ also opened a criminal investigation into RealPage, and the large apartment owners and managers that use the company’s pricing software, to determine if the firm is facilitating price fixing.
The DOJ crackdown on RealPage came as part of a major antitrust shift that closed Clinton-era loopholes on “information sharing.” That decision was a major win for Americans as it lowered the bar for antitrust cases — a bar that was previously so high you could drive a double decker bus through it and have room to spare.
In addition to RealPage, there is also the open DOJ antitrust lawsuit against Agri Stats Inc. for running anticompetitive information exchanges among broiler chicken, pork and turkey processors. Agri Stats allegedly collects, integrates and distributes price, cost and output information among competing meat processors, which allows them to coordinate output and prices in order to maximize profits. The fact discovery in the Agri Stats case is set to close on January 24, with dispositive motions due by July 2.
What will come of the RealPage case and wider efforts to rein in cartel behavior under Trump 2.0? To fully appreciate the stakes let’s first take a deeper look at what RealPage does and how now-closed Clinton-era loopholes (propagated by every administration after up until Biden) opened the floodgates to cartel takeovers of the American economy.
Why the Rent Is Too Damn High
In 2011, Warren Buffett said told the Financial Crisis Inquiry Commission the following:
“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
That type of pricing power came to many multi-family rental markets in recent years where major Wall Street owners turned to rental management software that essentially acts as collusion software. It sets prices and vacancy rates and helps the bottom line because property managers know that their “competitors” are also using RealPage’s system and will not undercut them. Company executive Andrew Bowen once said that the software was “driving it,” referring to rental price increases. He added: “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”
That pricing power from collusion allow RealPage and its peers like Yardi to play a role in the student loan crisis and students sleeping in cars. They play a role in the homelessness crisis. And they almost certainly play a role in your rent being so high — whether your landlord uses their software or not.
To really get a feel for the effect of the RealPage and property management company cartel, it’s best to look at individual metro markets. That’s because in cities like Seattle, San Francisco, New York, Boston, Nashville, Dallas, Atlanta, etc. the market can be dominated by large (oftentimes private equity-owned) companies, and if all of them are colluding using RealPage, the effect can be enormous. In Los Angeles County, for example, 79 percent of all multifamily rental units are being listed using collusion software.
Speculative investment vehicles have taken over much of the housing market, a trend that took off during the foreclosure regime of Obama when predatory billionaire investors increasingly began to buy up an unprecedented share of single-family homes, apartment buildings, mobile home parks, and the government-subsidized affordable housing sector. They have also been the most eager adopters of collusion software which effectively allows them to act as a cartel over many metro housing markets.
What happens with RealPage under Trump won’t just be confined to shelter. The DOJ’s updated stance on “information-sharing” affects other necessities like health care where Americans pay more than anyone else in the “advanced” world for the worst outcomes and food where cartel behavior contributes to the eye-watering cost of a trip to the grocery store nowadays.
Since the new administration will inherit the DOJ’s RealPage litigation, what direction it takes will tell us a lot about its wider position on the exchange of competitively sensitive information through the use of algorithmic software and potentially AI.
Closing Clinton-Era Loopholes Wide Enough to Drive a Truck Through
Between 1993 and 2011 the Department of Justice Antitrust Division issued a trio of policy statements (two during the Clinton administration and one under Obama) regarding the sharing of information in the healthcare industry. These rules provided wiggle room around the Sherman Antitrust Act, which “sets forth the basic antitrust prohibition against contracts, combinations, and conspiracies in restraint of trade or commerce.”
And it wasn’t just in healthcare. The rules were interpreted to apply to all industries. Companies increasingly turned to data firms offering software that “exchanges information” at lightning speed with competitors in order to keep wages low and prices high – effectively creating national cartels. The end result was RealPage, Yardi, and others like a long-running conspiracy among poultry producers to exchange information about wages and benefits for plant workers and collaborate with their competitors on compensation decisions.
In Feb. of 2023 the DOJ closed the information-sharing loopholes. From the statement announcing that decision:
After careful review and consideration, the division has determined that the withdrawal of the three statements is the best course of action for promoting competition and transparency. Over the past three decades since this guidance was first released, the healthcare landscape has changed significantly. As a result, the statements are overly permissive on certain subjects, such as information sharing, and no longer serve their intended purposes of providing encompassing guidance to the public on relevant healthcare competition issues in today’s environment. Withdrawal therefore best serves the interest of transparency with respect to the Antitrust Division’s enforcement policy in healthcare markets. Recent enforcement actions and competition advocacy in healthcare provide guidance to the public, and a case-by-case enforcement approach will allow the Division to better evaluate mergers and conduct in healthcare markets that may harm competition.
Essentially, the Biden DOJ took the logical approach that longstanding antitrust principles barring competitors from using human interaction to fix prices and wages applies equally to the use of software algorithms or AI.
But no judicial decision has yet adopted the DOJ’s position, and the incoming Trump administration can simply reverse the Biden DOJ decision. It remains unclear which way the Trump DOJ will go, but the search for signs is on. From Mintz, a “a litigation powerhouse and business accelerator serving leaders in life sciences, private equity, energy, and technology”:
As January 20, 2025, approaches, antitrust practitioners and the business communities are searching for clues whether the incoming Trump Administration and its antitrust officials will continue the Biden Administration’s approach to the exchange of competitively sensitive information, particularly through the use of algorithmic software.
Will Trump side with the billionaires seething over the DOJ and FTC efforts to rein in their rapaciousness ever so slightly or his working class supporters seething over their long decline in living standards caused by those billionaires?
Reasons for Skepticism
- Trump has promised to unleash AI upon taking office, which includes getting rid of the minimal Biden administration protections:
During the campaign, Silicon Valley figures like Elon Musk and Marc Andreessen helped shape the President-elect’s tech policy agenda. To “take the lead over China” on AI, campaign allies said the new administration will discard Biden’s AI guardrails and go full steam ahead on autonomous weapons, intelligence, and cybersecurity.
Still, it remains to be seen if that will apply to collusion software.
- Pam Bondi
Any hope that Trump’s first pick for attorney general, Matt Gaetz, would usher in a “Khanservative” DOJ looks like it’s circling the drain with Trump’s new pick Pam Bondi. Gaetz sexual proclivities were used to torpedo his nomination, likely due to his antitrust views.
Meanwhile, everything about the corporate lobbyist and foreclosure fraudster Bondi says that it’ll be open season for information sharing again.
3. Trump 1.0 and RealPage
It’s worth remembering that RealPage really took off following a crucial decision by the first Trump administration: the 2017 merger between RealPage and its largest pricing competitor. According to ProPublica, some DOJ staff raised concerns about the merger but were overridden by political appointees of Trump.
Reasons for Guarded Optimism
- The GOP is changing
As the failed nomination of Gaetz showed, Republicans are no longer universally opposed to antitrust. Vice President-Elect J.D. Vance and Sen. Josh Hawley, R-Mo., for example, hold similar views as Gaetz. George Washington University Law School professor William Kovacic, who served on the FTC from 2006 to 2011 and was chair from 2008 to 2009. With more via Roll Call:
Kovacic pointed out that Trump’s antitrust enforcers filed one of the cases against Google and Meta and started the investigation into what eventually became the case against Apple in the first term.
“I cannot readily imagine them pulling the plug on those cases, because you have this coalition that wants that kind of scrutiny to continue,” Kovacic said.
Kovacic said a throughline for both the Biden administration approach to antitrust and conservative criticism of big tech companies is that a traditional antitrust approach that emphasizes prices is not enough.Biden administration cases have discussed concerns around competition for small businesses and protection for local communities, while conservatives have criticized tech companies for allegedly censoring conservative voices online — both things have little to do with prices.
However, he pointed out that Republican commissioners on the FTC have objected to several of the agency’s moves and rulemakings and could reverse them in the second Trump administration, including its rule banning noncompete agreements. Kovacic also said that the Biden administration’s more aggressive approach on mergers — suing to stop them rather than accepting settlements to lessen the antitrust problems created by a deal — could fall by the wayside for both the FTC and DOJ.
If — and this is a big if — Trump wants to do right by his voters, he would not only continue the Biden administration’s antitrust action but ramp it up.
- J.D. Vance.
During the campaign, Vance on his “populist crusade”, made promises to continue antitrust enforcement, often sounding more like Bernie Sanders than a traditional Republican, but does he mean any of it? Or, as Thomas Frank has long highlighted, are Republicans like Vance simply adopting the language of the putative American Left to effectively attract voters long abandoned by the Democrats?
While smart politically (there’s a reason Bernie was popular and the Democrats had to use dirty tactics to kill his campaigns) there could be limits to Vance’s “populist crusade” and they’re set by Silicon Valley. Vance hails from both the venture capital world and the poverty of West Virginia. Who will he prioritize?
And here’s where this point becomes another one for skepticism. From The Verge:
Vance has played at being a man of the people, but he owes his place on Trump’s ticket to Silicon Valley’s billionaires. After all, he is a pet of Thiel, who put forward $15 million for Vance’s Ohio Senate campaign. (There were other wealthy donors, too, including Oculus founder Palmer Luckey.)
While reassuring Silicon Valley it will still have access to “high-talent, high-quality” workers, Vance is leading the charge in shifting the blame for Americans’ long decline in living standards onto immigrants, which could work for a short period until people notice that their lives aren’t improving all that much. It could also divert attention away from antitrust issues and cases like RealPage.
Still, it’s a low bar to clear to be better than the sanctimonious Democrats at this point. An end to all the lectures might be welcome even if it doesn’t necessarily result in an improving quality of life.
If we’re counting, that’s four points for skepticism and 1.5 for optimism. Thankfully, some tenants aren’t waiting for the Trump administration to fix things.
Tenant Action
Regardless of what happens with RealPage, housing policy in the US is so geared towards rent seeking and the fixes needed are so numerous that the path forward is unlikely to originate in DC.
Tenants across the country are increasingly taking matters into their own hands.
A growing number of tenants’ unions across the country are coordinating rent strikes to protest rent increases and decrepit living conditions. And they’re finding some success. A union in Kansas City, for example, used a rent strike to get millions in overdue repairs to their building. Other Kansas City tenant unions are emulating that successful rent strike, and more action like this could be on the way according to Ruthy Gourevitch and Tara Raghuveer of the Tenant Union Federation:
Absent meaningful action from the government, the question is not whether tenants will revolt, but whether the revolt will be from a place of desperation or a place of power. To ensure the latter, tenants are organizing unions, from Bozeman, Montana, to Louisville, Kentucky. Unions are uniting across geography, and aligning through groups like the newly launched Tenant Union Federation, which we launched this year. Drawing inspiration from the labor movement and community organizing, tenant unions reflect the urgency to build a new kind of power to seriously contest the forces of real estate capital.
Tenant unions seek a different system entirely, where homes are not treated as commodities but guaranteed as public goods, and where our lives are not reduced to line items in a landlord’s budget. This vision isn’t a radical fever dream; it is the only way out of this mess. Ultimately, achieving this vision will require rejecting the market as we know it today and creating publicly backed, nonmarket alternatives. Before we get there, tenants need protections. As tenants build local power within buildings and across neighborhoods, these unions are also demanding a regulatory agenda.
Gourevitch and Raghuveer go on to outline that regulatory agenda, which includes national rent caps, anti-eviction protections, habitability standards, and antitrust action to prevent consolidation and collusion in the rental market.
Even better would be tenant-owned housing, such as what happened in Maine recently when residents of Linnhaven Mobile Home Center, a community of nearly 300 occupied homes in Brunswick, banded together to buy their trailer park to prevent it from falling into the hands of private equity.
Actions like that and tenant organization are likely to prove far more effective than relying on Trump, Bondi, or whatever ghoul the Democrats put in office next.