FTC and DOJ File Joint Legal Brief on Algorithmic Price Fixing in Housing Market

The Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) filed a joint legal brief on March 1 expressing concerns related to algorithmic price fixing in the housing market. In the brief, the FTC and DOJ focus on the potentially anti-competitive effects of algorithms, which could facilitate collusion or price fixing in violation of antitrust laws. The joint brief underscores growing regulatory scrutiny of the use of algorithms in pricing mechanisms in the residential housing market.

Algorithmic price fixing can undermine healthy market competition, leading to higher costs for consumers. Low-income families often bear the brunt of these price increases. In the brief, the agencies argue that the process of establishing prices by means of an algorithm qualifies as price fixing. The brief aims to safeguard competitive marketplaces, promoting affordability and ensuring that pricing structures are not manipulated to the detriment of vulnerable populations.

“The agencies’ work in this space is especially important given rising residential housing rental prices,” writes the FTC in a blog post about the brief. “Rent is up nearly 20% since 2020, with the largest increases concentrated on lower- and middle-tier apartments rented by lower-income consumers. About half of renters now pay more than 30% of their income in rent and utilities, and rising shelter costs were responsible for over two-thirds of January inflation.”

The agencies’ call for vigilance by companies using algorithms sends a message that fair and ethical business practices are essential. By discouraging price-fixing algorithms, the FTC and DOJ contribute to an environment where companies are incentivized to adopt pricing models that prioritize fairness and equity, which can positively impact low-income consumers.

Read the joint brief at: https://tinyurl.com/2swt4cey

Read the FTC blog post at: https://tinyurl.com/muryn953