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> Now you can reasonably dispute whether the Lessor employee carrying out day to day responsibilities actually has pricing responsibility

I do dispute it, because it even suggests later that "the dispute is often elevated to the Lessor’s management for resolution". It implies some percentage of these disputes don't bother getting elevated, probably because that user actually did have pricing authority and could just change the price. Most users of the system would not have this permission. Just like most employees at the checkout counter can't change the price without approval.

Do I agree this market is a bit strange for having these algorithmically generated prices? Sure. Should it be investigated for potentially illegal business practices? Sure. Is requiring a manager approval for changing the price from what those with pricing authority originally set it to, even if that price is essentially "auto", strange? No.




> It implies some percentage of these disputes don't bother getting elevated, probably because that user actually did have pricing authority and could just change the price

Or it implies that when the Pricing Advisor won't change the model, they are persuaded to back down and accept the prices given, by a company that insists its valuation model will only work if clients adhere to its prices >80% of the time[1]. Or that sometimes the "Pricing Advisor", notionally a customer success employee of an ISV, has some sort of executive authority to adjust the price which that Lessor's own employee doesn't. Certainly those two outcomes are those the drafter of the lawsuit intended to imply, regardless of which is actually the most frequent.

It'd be odd if a company put the equivalent of a checkout operative on the call with a third party "Pricing Advisor" to discuss the price (both in general and in the context that RealPage supposedly encourages daily calls with employees "with pricing responsibility").

[1]I sold an algorithmic valuation model once. It's something of an understatement to say that this is not how valuation models ordinarily work or the sort of feedback a valuation professional behind the model would ordinarily give to clients...


Your argument is quickly drifting away from what you were originally suggesting, which was that RealPage had some power to arbitrarily block their customers from changing their prices and truly enforce their suggested prices (see your statement "is typically the only party in the loop with the ability to settle the disagreement"). Now its just that they have a lot of persuasion to those with pricing authority. Which sure, investigate that, I agree.

So yeah, investigate those calls. Investigate how the pricing algorithm comes up with its price. Investigate how much the marketing is pushing cartel-like behavior. Smash it with a hammer if they're breaking the law.

But the fact that requiring front of line employee pricing changes to be approved by someone in management at the property management/ownership as something wrong or needing investigation, that's pretty normal. Most users of RealPage wouldn't have pricing authority! They're front of house salespeople. Its these kinds of requests to change the prices that would come under review, and that approval wouldn't be at the decision by RealPage. Sure, maybe RealPage has a lot of persuasion over the person making that final decision, but ultimately whoever has pricing authority at that property (not a RealPage employee) isn't the one that clicks "Approve" either way.

Awaiting approval from your manager to change the price is not evidence of price fixing, which is what I originally replied to.


Your argument is quickly drifting away from the actual process described in the document

>> 51. Specifically, every morning, RealPage provides participating Lessors with recommended price levels. Lessors typically must communicate to a RealPage “Pricing Advisor” that they have “accept[ed]” or “confirm[ed] the “approved pricing” within a specified time frame. If Lessors wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval. RealPage encourages participating Lessors to have daily calls between the Lessors’ employees with pricing responsibility and the RealPage Pricing Advisor.

>> 52. If there is a disagreement between the participating Lessor and the RealPage Pricing Advisor, the dispute is often elevated to the Lessor’s management for resolution, and specific reasons justifying a departure from RealPage’s pricing level are usually required. But RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating Lessors must adopt RealPage’s pricing at least 80% of the time

There is nothing remotely normal about someone having the executive decision making authority to authorise a price variation a third party is trying to make to their inventory but not the executive authority to keep prices as they were. Nor is there anything remotely normal about a person seeking approval to retain or change price contacting a third party company's "Pricing Advisor" in the first instance rather than the approver within their own company. If the "Pricing Advisor" didn't have greater ability to resolve this "dispute" than the staff member who has the ability to "approve" a price change but apparently not to hold prices as they are, why would they be contacted?

Nobody has argued there isn't some ultimate beneficial owner of a property with the power to tell RealPage to bugger off, they're arguing that as described this resembles a normal chain of authority and consultation of third party experts in roughly the same way an MLM resembles a regular sales team. Now if you want to argue that this is deceptive wording on the part of the firm drafting the lawsuit stitching lots of discrete elements together into the appearance of a single process of questionable legality, I'll agree that may be possible (putting the worst possible spin on things is a class action lawyer's job) but then, some evidence of that would be nice...


My argument hasn't drifted away from what this process is. Combining the logic here in an easier to follow workflow:

Ownership/management chooses to buy RealPage for their property management solution for a building. They decide to configure it and contract out Pricing Advisor services. They've now established the default prices are whatever RealPage suggests it should be.

They then hire a lot of leasing agents (or they hire a leasing agency who hires these people). These are front of line sales people. These people are getting the day to day updates on changes to these prices, which are supposedly algorithmically generated. These are the people you'd want to review these prices, because these are the people who are actually dealing with the day to day of trying to sell these units. If these prices that the advisor is suggesting are unreasonable, they should probably push back and make a recommendation to change the price. They're the ones hearing customers argue the prices are overpriced and what not, they're a bit closer to the ground truth of the price in many ways.

However, those front line workers probably should not have arbitrary pricing powers. They're just focusing on signing leases, not necessarily broader picture of the building's business.

So talking about the approval process (which was the whole point I was originally replying to, not the algorithmic pricing or the whole weird relationship of RP to lessors which I've agreed should be investigated), lets just remove the whole algorithmic side of things. Upper management said units lease for $2/sqft. Front of line leasing agent decides to start signing leases for $1.75/sqft. Should that front of line leasing agent have been able to change the price from what upper management wanted without seeking an approval? Should they have probably given a written reason for going against the established pricing structure upper management chose?

So now lets enter back the idea of the algorithmic pricing. Upper management likes this dynamic algorithmic pricing. They say, whatever the algorithm sets, that's the price today. Algorithm says $2/sqft. Front of line leasing agent thinks a more realistic price is $1.75/sqft. Should that front of line leasing agent just be able to arbitrarily decide what the price is without seeking some approval? Ultimately, that review isn't some RP agent; that review is the same manager as before.

I think you're conflating the people with pricing authority on the call with the Pricing Advisor and the people who would often be submitting pricing changes for approvals. If they're having to get the pricing change approved by their management, then by definition they didn't have pricing authority. The people with pricing authority are the ones who made the decision to use this whole Pricing Advisor system, and are continuing to allow the Pricing Advisor use their black box to tell them what the price is today. The ones on that call are the ones that can tell RP to bugger off, as by definition they have pricing authority.

I do agree the algorithmic pricing is weird, and a lot of markets don't behave this way. I do think there's some bad relationships what with the pricing advisors and the large market presence of RP. These things should be investigated and potentially have judgements against. The fact its literally saying "coordinated algorithmic pricing" is a major red flag there's something bad happening here. The "coordinated" part is the part is the thing that's bad, not that front of line employees need approvals to change prices or even just the basic idea of using algorithms to set prices.


Sure, if you remove the features which are problematic, the process ceases to be problematic!

But the actual process as described involves an algorithm operated by a third party varying an organization's price, a representative of that company being required to communicate their acceptance or disagreement with reasons to the third party, the staff member with that executive responsibility being encouraged to speak to a representative of the third party, and escalate to unspecified management only in the case a "dispute" is not resolved by that third party.

That's not at all similar to how a regular approval process works with even the most junior staff members, and the idea it applies only to front of house staff is entirely your invention.

Every member of every unlawful cartel ever had senior decision makers who chose to sign up to the cartel and could tell it to bugger off or make the odd exception. That doesn't mean they can't be accused of price fixing in the event they take the decision to delegate day to day pricing to an organization also setting their competitors' prices, or even worse involve them in the review/approval chain for exceptions to those prices.


> Awaiting approval from your manager to change the price is not evidence of price fixing, which is what I originally replied to.

This is ultimately all I'm arguing. I'm entirely in agreement the relationship between RP and a significant chunk of the market, and the fact they're naming the pricing strategy as coordinated sounds exactly like price fixing.

But, requiring a manager to approve a change in pricing, that isn't odd. That singular thing, that's all I'm talking about, because that's what I originally replied to here.

> > await approval

> Sure seems like RealPage is price fixing then

Awaiting approval from your manager to change the price is not evidence of price fixing. Do you disagree with this basic premise?


I disagree with the basic premise that what is actually described in the situation described - a third party called a "RealParty Pricing Advisor" does not need approval from a manager to change prices, whilst an employee tasked with the responsibility of confirming the day's prices is presented with the options of either confirming the change (to the third party) or entering into a dispute resolution process (involving the third party) even just to keep one of the prices the same - represents a normal process of price changes being signed off by a manager.




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