This is not hypothetical, it actually happened, and a lot more than two landlords were involved. 14 companies, and "Across a wider Washington-Arlington-Alexandria area, more than 90 percent of units in large buildings are subject to RealPage pricing, according to Schwalb's office."

Profit margins are high if you collude with 90% of the market to artificially raise prices.

Where did you get that from the article?

> The complaint, filed earlier today by Attorney General Brian Schwalb, focuses on the multifamily landlords' use of software from Texas-based firm RealPage, which suggests rental prices based on a pricing algorithm. Key to those models, according to the suit, is the data fed in from the landlords and the pressure RealPage puts on them to stick to the code-derived rental rates.

It's a complaint. Nothing was filed yet. And it looks like they used a pricing algo to suggest a price? Im suggested a price when I sell on eBay, or StubHub or Facebook marketplace, or pretty much anywhere. I don't know how they "pressured" landlords but maybe a box like "we suggest market price to maximize returns!" eBay similarly warns me when I stray too far away. The pricing algo is actually a fabulous service.

And if they're a property manager then their job is to find the market price and rent out apartments at the behest of landlords. I really don't see the technical issue here. You can say collude and conspire, but what does that mean in technical terms. And what does "being subject to" the algo mean? Exposed?

I got it from the linked Propublica investigation. There is quite a bit of information in there about how the software works and what the real-world results have been.

> You can say collude and conspire, but what does that mean in technical terms

RealPage requires users to accept some % of centrally-decided prices.

That's the issue.

> And what does "being subject to" the algo mean? Exposed?

No. It means being required to set prices to what the algo says, instead of being allowed to "defect",with lower price.

Indeed it is a gamble.

Which is why the very bad and illegal part, of the software company trying to enforce the high prices, was so bad.

This only works if landlords can't "defect" and lower prices on their own.

That's why it's collusion.

Yeah I you have just explained why it is collusion. In a free market, a landlord raising price too high will be afraid of losing market and having too much vacancies. But not here, he is relatively assured he won’t be losing much since other landlords won’t undercut him, since they have implicitly agreed via the software to follow the same pricing. That’s collusion. Period