The company behind popular property management software YieldStar is facing a class-action lawsuit, at least in part thanks to ProPublica's reporting. Is this deserved?
1. The rental market is nothing like the stock market. Rent transparency is entirely asymmetric. There is no YieldStar for renters. Such asymmetry cannot make a fair market. Moving also involves significant transaction costs and upheaval, unlike zero-fee stock trades.
3. You can most certainly have antitrust violations without explicit price fixing: payments to delay generics and employee non-poaching agreements among Google, Adobe, etc. are just two examples of many deemed to have violated antitrust laws without explicit collusion or price fixing.
4. Scale and transaction costs matter. YieldStar makes trivial what would previously have required dozens or hundreds of phone calls and hours of work to collect a tiny fraction of the data in an Excel spreadsheet that would be obsolete in a month. Automating this process can distort the rental market just as algorithmic trading has distorted the financial market.
These are just the factual problems with your naive take. The much bigger problem is that you wrote this without testing your own biases, opting instead for snark, which calls into question your intelligence and supposed objectivity.
1. Agreed that they're dissimilar markets! Indeed *that's the point*. YieldStar is trying to replicate some of the price transparency of equities markets! (As for "YieldStar for renters", see footnote 3. While I'd be all for renters getting data access in theory, one obvious problem is how hard it would be to accomplish this without providing the data to other landlords who just don't want to pay. But even if you solve that problem, it's not obvious that this would make a material difference to renters. Apartments are more fungible than houses, and even eg. MLS comp data is actually more of a tool for sellers than buyers. Realtors often use it to talk sellers into reasonable pricing / to pierce their out-of-touch views. Buyers already have a more granular sense of value via the shopping process itself. That's the magic of competitive markets.)
2. It's not an "almost perfect" analog. Airlines have *enormous* barriers to entry. The cost of buying a few MF properties ($25-30k per door) <<< the cost of buying even a very small airline, which makes it much much easier to undercut a would-be cartel while still turning a profit. And it wasn't "almost identical" behaviour. The airlines really did fix prices! And you can't do that without coordinated control of a substantial part of the market--which isn't even true of the most cherry-picked zip code that ProPublic could find!
3. You're listing random other things that are crimes and saying "aha, these are crimes that don't require price fixing!". Murder is also a crime, and is similarly irrelevant here. The FTC itself is explicit on this point: the kind of price transparency being created here is absolutely not a crime, nor even moderately shady. That you can build on price transparency *to proceed to antitrust crimes* doesn't mean that the precondition itself is problematic!
4. There's nothing illegal (or again even vaguely unethical) in improving the efficiency of price transparency. It's also not meaningfully true that "algo trading has distorted the financial market". There are some interesting arguments out there about the cutting edge of HFT (most of which have been wildly overstated by people with a low understanding of the field), but none of them are relevant here where latency is daily or so.
As for your final paragraph, what can be asserted without examples can be dismissed without commentary--especially noting that the examples you did provide were... less than compelling.
I invite (and very much appreciate) criticism. But the expertise and effort behind the criticism matters.
Breech instead of Breach.
Ah thank you! I seem to have some mental block on that pair. Appreciate you flagging. :)
1. The rental market is nothing like the stock market. Rent transparency is entirely asymmetric. There is no YieldStar for renters. Such asymmetry cannot make a fair market. Moving also involves significant transaction costs and upheaval, unlike zero-fee stock trades.
2. An almost perfect analog to YieldStar is the airline ticket reservation systems and the DOJ sanctioned airlines for almost identical anticompetitive behavior 1994. https://www.justice.gov/archive/atr/public/press_releases/1994/211786.htm
3. You can most certainly have antitrust violations without explicit price fixing: payments to delay generics and employee non-poaching agreements among Google, Adobe, etc. are just two examples of many deemed to have violated antitrust laws without explicit collusion or price fixing.
4. Scale and transaction costs matter. YieldStar makes trivial what would previously have required dozens or hundreds of phone calls and hours of work to collect a tiny fraction of the data in an Excel spreadsheet that would be obsolete in a month. Automating this process can distort the rental market just as algorithmic trading has distorted the financial market.
These are just the factual problems with your naive take. The much bigger problem is that you wrote this without testing your own biases, opting instead for snark, which calls into question your intelligence and supposed objectivity.
1. Agreed that they're dissimilar markets! Indeed *that's the point*. YieldStar is trying to replicate some of the price transparency of equities markets! (As for "YieldStar for renters", see footnote 3. While I'd be all for renters getting data access in theory, one obvious problem is how hard it would be to accomplish this without providing the data to other landlords who just don't want to pay. But even if you solve that problem, it's not obvious that this would make a material difference to renters. Apartments are more fungible than houses, and even eg. MLS comp data is actually more of a tool for sellers than buyers. Realtors often use it to talk sellers into reasonable pricing / to pierce their out-of-touch views. Buyers already have a more granular sense of value via the shopping process itself. That's the magic of competitive markets.)
2. It's not an "almost perfect" analog. Airlines have *enormous* barriers to entry. The cost of buying a few MF properties ($25-30k per door) <<< the cost of buying even a very small airline, which makes it much much easier to undercut a would-be cartel while still turning a profit. And it wasn't "almost identical" behaviour. The airlines really did fix prices! And you can't do that without coordinated control of a substantial part of the market--which isn't even true of the most cherry-picked zip code that ProPublic could find!
3. You're listing random other things that are crimes and saying "aha, these are crimes that don't require price fixing!". Murder is also a crime, and is similarly irrelevant here. The FTC itself is explicit on this point: the kind of price transparency being created here is absolutely not a crime, nor even moderately shady. That you can build on price transparency *to proceed to antitrust crimes* doesn't mean that the precondition itself is problematic!
4. There's nothing illegal (or again even vaguely unethical) in improving the efficiency of price transparency. It's also not meaningfully true that "algo trading has distorted the financial market". There are some interesting arguments out there about the cutting edge of HFT (most of which have been wildly overstated by people with a low understanding of the field), but none of them are relevant here where latency is daily or so.
As for your final paragraph, what can be asserted without examples can be dismissed without commentary--especially noting that the examples you did provide were... less than compelling.
I invite (and very much appreciate) criticism. But the expertise and effort behind the criticism matters.