| PROSPERITY PUB MARKET TALK
Can An Algorithm Be Illegal?
A lot of hoopla has been made of Facebook, TikTok, and other social media platforms — not only for their addictive nature but also for their power to create echo chambers, leading users into vastly different realities and leading to real societal harm.
At the root of these issues are the algorithms these sites use to feed posts to users. Despite the controversies, little to no legal regulation has emerged in the social media world.
But a significant development occurred recently when the FBI raided Cortland Management as part of a broader investigation into RealPage, a software company that allegedly manipulates rental prices across the U.S.
RealPage’s algorithm provides rental price recommendations based on detailed data from landlords.
This coordination among landlords has led to inflated rental prices, even in markets with high vacancy rates — essentially a sort of price-fixing scheme, enabled by an algorithm.
The raid marks a significant step in the Department of Justice's criminal antitrust investigation, which could have far-reaching implications for renters nationwide.
RealPage's influence extends to over 16 million rental units, driving rents up in cities like Atlanta, where rents have surged by 80% since 2016.
The DOJ's investigation could result in stricter regulations and greater oversight of software firms like RealPage.
Renters everywhere are likely breathing a sigh of relief, as skyrocketing rents account for a big part of the inflation families everywhere are seeing.
The investigation could mean significant changes in rental pricing. If the allegations are proven, it could lead to relief from skyrocketing rents and more transparent pricing practices.
This situation brings up an important question: Can an algorithm be illegal? While the concept is relatively untested, the outcomes of this case could set a precedent for future regulatory actions.
Stay tuned to see how this legal battle plays out and what it means for the future of algorithm-driven markets.
— The Prosperity Pub Team
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