Are We Entering an AI Price-Fixing Dystopia? (theatlantic.com) 61
"Algorithmic price-fixing appears to be spreading to more and more industries," warns the Atlantic. "And existing laws may not be equipped to stop it."
They start with RealPage's rental-property software (pointing out that "a series of lawsuits says it's something else: an AI-enabled price-fixing conspiracy" and "The lawsuits also argue that RealPage pressures landlords to comply with its pricing suggestions.") But the most important point is that RealPage isn't the only company doing this: Its main competitor, Yardi, is involved in a similar lawsuit. One of RealPage's subsidiaries, a service called Rainmaker, faces multiple legal challenges for allegedly facilitating price-fixing in the hotel industry. (Yardi and Rainmaker deny wrongdoing.) Similar complaints have been brought against companies in industries as varied as health insurance, tire manufacturing, and meat processing. But winning these cases is proving difficult.
The article notes that "Agreeing to fix prices is punishable with up to 10 years in prison and a $100 million fine." But it also notes concerns that algorithms could produce price-fixing-like behavior that's "almost impossible to prosecute under existing antitrust laws. Price-fixing, in other words, has entered the algorithmic age, but the laws designed to prevent it have not kept up." Last week, San Francisco passed a first-of-its-kind ordinance banning "both the sale and use of software which combines non-public competitor data to set, recommend or advise on rents and occupancy levels."
Whether other jurisdictions follow suit remains to be seen.
In the meantime, more and more companies are figuring out ways to use algorithms to set prices. If these really do enable de facto price-fixing, and manage to escape legal scrutiny, the result could be a kind of pricing dystopia in which competition to create better products and lower prices would be replaced by coordination to keep prices high and profits flowing. That would mean permanently higher costs for consumers — like an inflation nightmare that never ends.
They start with RealPage's rental-property software (pointing out that "a series of lawsuits says it's something else: an AI-enabled price-fixing conspiracy" and "The lawsuits also argue that RealPage pressures landlords to comply with its pricing suggestions.") But the most important point is that RealPage isn't the only company doing this: Its main competitor, Yardi, is involved in a similar lawsuit. One of RealPage's subsidiaries, a service called Rainmaker, faces multiple legal challenges for allegedly facilitating price-fixing in the hotel industry. (Yardi and Rainmaker deny wrongdoing.) Similar complaints have been brought against companies in industries as varied as health insurance, tire manufacturing, and meat processing. But winning these cases is proving difficult.
The article notes that "Agreeing to fix prices is punishable with up to 10 years in prison and a $100 million fine." But it also notes concerns that algorithms could produce price-fixing-like behavior that's "almost impossible to prosecute under existing antitrust laws. Price-fixing, in other words, has entered the algorithmic age, but the laws designed to prevent it have not kept up." Last week, San Francisco passed a first-of-its-kind ordinance banning "both the sale and use of software which combines non-public competitor data to set, recommend or advise on rents and occupancy levels."
Whether other jurisdictions follow suit remains to be seen.
In the meantime, more and more companies are figuring out ways to use algorithms to set prices. If these really do enable de facto price-fixing, and manage to escape legal scrutiny, the result could be a kind of pricing dystopia in which competition to create better products and lower prices would be replaced by coordination to keep prices high and profits flowing. That would mean permanently higher costs for consumers — like an inflation nightmare that never ends.
Turn the tables (Score:2)
Re: Turn the tables (Score:1)
Apple banned all such apps from the app store.
Re:Turn the tables (Score:4, Insightful)
Re:Turn the tables (Score:5, Insightful)
The only way for consumers to negotiate is to refuse to buy, i.e. boycott their products & services.
Which is what I keep saying, but people keep finding excuses why they can't do that. They can't not buy from Amazon. They can't not buy from Walmart. They can't not use one of the food delivery services which costs them 2 to 3 times what it would to pick up the food themselves. There's always an excuse.
That said, when it comes to renting, you're screwed. You either take the inflated rental cost or live in your car. There is no in between.
Re:Turn the tables (Score:4, Insightful)
people keep finding excuses
Typically when you keep hearing that it tends to mean that the problem is widespread enough that your proposed solution isn't viable in practice.
In this case, when you have multiple industries (per TFS) trying to use AI / algorithms to engage in illegal price fixing, you start running out of places that aren't subject to said boycotts. Further, these aren't exactly services and products that can be avoided entirely. Housing, healthcare, food, etc. are all required for people to live. A complete boycott of said industries would mean people starving to death in the streets and dying of easily treated medical conditions. No-one is going to die willingly for someone else's preferred method of handing bad actors.
In the end, the government's first and only reason for it's existence is to protect it's citizens. It's long been time to declare these bad actors for what they really are, enemies of society, and address them through legislation.
Just feed it attention it needs to change prices (Score:2)
If millions of people window shop at the shoe store on one side of Main Street, the shoe store on the other side of Main Street may have better and better sale prices with lower and lower priced products.
If you think a store does something like escalator pricing based on the last 1 hour of product views, then give higher attention (page views) to a product you do not want so that the product you do want gets progressively cheaper.
An AI sheep dog expects a runaway sheep to run away from the flock. The AI sh
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In the end, the government's first and only reason for it's existence is to protect it's citizens.
Nonsense, who taught you that?! The governments first and only reason for it's existence is to keep being "the government". Protecting the citizens is part of the government's purpose only because the citizens will overthrow the government if it doesn't protect them, through election or otherwise. The government always has to balance public satisfaction against government interest.
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Consumerism gives the victims the illusion of power & choice when they actually have none. Just look at the number of people who say, "Xitter has become a toxic, Nazi cesspool. I'm leaving!" You know they'll be back in a few weeks or months.
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That said, when it comes to renting, you're screwed. You either take the inflated rental cost or live in your car. There is no in between.
How about move to somewhere that's not as expensive? Or move in with family? Or start a commune? Or become a migrant farm worker? Or find a sugar daddy/momma?
Not all of those suggestions are serious, and I'm sure that's not an exhaustive list, but the algos are only suggesting prices that the market will bear; stop bearing them, and they'll have to stop charging them.
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> The vendors are artificially inflating prices & circumventing competition
They're not "artificially inflating prices"
Each of the companies involved has a fiduciary duty to maximize their profits based on market prices, supply and demand. Its only antitrust when you erect artificial barriers to trade, and if anything I would say that HOA's and zoning regulation do more to "artificially inflate prices", than checking market prices algorithmically.
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They are colluding to raise prices to the maximum available.
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NO. They are artificially increasing prices through collusion. They are FAILING their fiduciary duty long term by inviting government and society to bring the hammer down on them.
HOAs have already inspired at least some hammering in some places and a growing call for it in many others.
Zoning is an issue to take up with local governments and at the ballot box.
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The primary argument of markets (as compared to command economies) is a "wisdom of the crowds" to determine value. Disallow that, and it's just variation of a command economy (very reminiscent of certain socialist countries to use computers to determine "value"). And if so, why should that strictly serve shareholders only? Can't have your cake and eat it too.
Further, if "fiduciary duty" is the only north star for a company, add on effects be damned, then that is just an invitation to dissolve the very notio
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There is always at least one in these threads that gladly gobbles the corporate cock and takes everything they have to give.
In this thread you, friend, are that cock gobbler.
On your knees bitch.
Re:Turn the tables (Score:4, Insightful)
Each of the companies involved has a fiduciary duty to maximize their profits based on market prices
Except they're maximizing their profits based on a third party's suggestions based on data gathered from the companies and their competitors who just happen to use the same third party.
It's a white-washed version of collusion and has nothing to do with market prices.
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TL;DR: AI cannot fix human greed.
Ya, but ... (Score:3)
Are We Entering an AI Price-Fixing Dystopia?
Isn't that one of the points of AI to help with the drudgery of thinking about things? I mean, think how tedious it is to have to track the price of other things and determine the price of your things, especially if you actually consider your costs, in order to compete.
[Don't worry though, sooner or later AI will determine that the biggest part of any problem is humans and they'll help with that too.]
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Don't worry though, sooner or later AI will determine that the biggest part of any problem is humans and they'll help with that too.
The cause is human greed. I.e. An AI can come up with a plan that would work for everyone involved at minimal expenditures, but it doesn't matter because one asshole demands greater enrichment over everyone else, and that enrichment would render the plan unworkable.
So the simplest solution is to remove that one asshole from the equation. Which leads to more removals.....
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The cause is human greed. I.e. An AI can come up with a plan that would work for everyone involved at minimal expenditures, but it doesn't matter because one asshole demands greater enrichment over everyone else, and that enrichment would render the plan unworkable.
And while I'm all for people getting ahead and being secure and comfortable in their lives, etc... at some point you don't really need more. I mean, what can the super rich do that they can't do with half, or just less, of what they have? Do you really need 8 homes, 15 cars and 2 boats? Sounds like a pain the ass to me. Does a CEO need to make 344 times the average worker?
The CEO Pay Problem and What We Can Do About It [progressiv...center.org] (Nov 2023)
The CEOs in this group averaged $16.7 million, while average worker pay stood at $61,900. Using a slightly different methodology and sample, the Economic Policy Institute found that CEOs were paid 344 times as much as a typical worker in 2022, up from an average pay ratio of just 21 to 1 in 1965.
More sources: CEO vs worker pay [google.com]
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Take your meds.
Prove them wrong. It was Republicans who attacked the capitol. The same Republicans who keep talking about groomers, and yet [imgur.com] . . .
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Oh so now you suddenly don't like people exercising their second amendment rights?
Re: Looks like both to me (Score:2)
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Re: Nah, it's fine (Score:2)
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Yes, they're complaining that free markets exist, next thing you know they're going to allege that the stock market is "price fixing", under the tortured logic of this plan.
Re:Nah, it's fine (Score:5, Insightful)
Price fixing aligns perfectly with their philosophies.
Under communism, there's one price because the government controls the means of production and sets the price.
Under unrestricted capitalism, there's one price because the companies collude to maximize profits.
You'll generally find that most "leftists" aren't quite as extreme as you imagine and just want the government to step in and force the capitalists to play fair. That actually helps promote the whole competition thing which tends to actually result in lower prices.
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Price fixing aligns perfectly with their philosophies.
Under communism, there's one price because the government controls the means of production and sets the price.
Under unrestricted capitalism, there's one price because the companies collude to maximize profits.
You'll generally find that most "leftists" aren't quite as extreme as you imagine and just want the government to step in and force the capitalists to play fair. That actually helps promote the whole competition thing which tends to actually result in lower prices.
I find people who use "left" or "leftist" as a pejorative are really just saying "I'm upset at anyone not as far to the right as I am".
I'm generally a libertarian leaning person, economically and socially (you can sexually self identify as any kind of aircraft, hovercraft or rigid airship you damn well please) but we accept limits on what businesses can do because otherwise you end up with situations that are harmful to customers or even to society itself. Most of us who are old enough to remember Micros
Just offer bounties (Score:2)
Any good algorithm would have take into account the companies costs, room/desire for expansion etc etc. If it's just looking at the total market supply/demand and optimizing profit for the market as whole, without trying to leverage comparative advantage, that doesn't happen by accident. From engineering to sales to the buyers, everyone would know what's going on.
You can try to test if customers are artificially equally distributed, but you can also just offer bounties to whistleblowers same as SEC. Some di
With everything commercialized ... (Score:3)
... and optimized for maximum pricing not buying will soon become the only option. People who (have to) resort to that will live on the fringes of society.
This has long been coming and has been foretold. It even has a distinct name: Cyberpunk.
Couldn't say I'm looking forward to experiencing that in reality I must admit.
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Yep. It's a big win for R. Talsorian games that the title of their genre-inspired (and eponymous) RPG called for Cyberpunk in 2020. They were only a little optimistic, which is wonderfully ironic.
But where are the orbitals? I was also promised orbitals.
Cyberpunk ... (Score:2)
... is an entire literary genre. William Gibson, Neal Stephenson and a few others are generally regarded either as Pioneers or key authors of Cyberpunk.
Have you read Snow Crash from Stephenson? Or the Neuromancer or Bridge Triology by Gibson? ... If not, highly recommended, especially if you like the Cyberpunk RPG (on- or offline). The Cyberpunk RPG is basically inspired by Gibson, the Bladerunner Movie and a few other pioneering works.
Back in my old RPG days I never got around to playing the TTRPG. Today n
Re: Cyberpunk ... (Score:2)
"Have you read Snow Crash from Stephenson?"
You must be on mobile. My .sig is from snow crash.
Capitalism, (Score:2)
Switch to Time Banking (Score:3)
This is the common sense thing we already think is 'fair', one hour of my time is worth one hour of your time, money, a layer of abstraction screws that up. Read it:
https://freakonomics.com/podca... [freakonomics.com] or watch it:
https://www.youtube.com/watch?... [youtube.com]
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That's a terribly naive view. An hour of an apprentice's time is surely not worth the same as a master's. That master can do far more in an hour than an apprentice.
There are definitely problems with the model of capitalism where profit goes to owners instead of the people actually creating value. However, accounting for the different value of different skill levels/productivity is not one of capitalism's failings.
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An hour of an apprentice's time is surely not worth the same as a master's. That master can do far more in an hour than an apprentice.
when it comes to doing some specific advanced stuff, maybe, but having that apprentice might double the masters throughput because he doesn't have to do everything himself.
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Levels.FYI (Score:2)
Why all the fuck you? (Score:2)
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Might as well mandate all sellers charge MSRP at this point, competition is dead.
Capitalism seeks the lowest moral denominator (Score:4, Insightful)
Sometimes it slips across the line into what is illegal, but mostly, it prefers to stay just north of there... at the point of the lowest possible moral position that is not illegal. That's the sweet spot for the shareholders.
LLMs are just particularly good at mimicking that philosophy. As long as the investors allow the LLMs to make the decisions for them, this will accelerate.
Way too much credit to AI (Score:2)
Everybody is talking about AI as if it's Actual intelligence. AI is good a detecting and replicating patterns. It can't actually think. Somebody still has to tell the AI what they want, just like you still have to tell ChatGPT what you want. If a business uses AI to inflate prices, people aren't stupid, they'll figure it out and shop somewhere else. It certainly doesn't take AI to inflate prices!
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Don't blame AI, blame backroom automated price collusion. This is almost impossible to stop when they just set their price match tool to match each other's lowest price.
'We didn't collude we just price matched each other'
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The problem with the point, is that there is *always* somebody who is not part of the cartel. You might have a bunch of sellers attempting to use AI to run their price-fixing scheme. But some other shrewd merchant will undercut the AI's inflated price, and ruin the whole scheme.
Amazon already tries this stuff, with or without AI. Their prices are all over the map, you've got to really watch what you're doing when you shop Amazon, you might end up paying far more than you should. Luckily, there is competitio
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If such landlords exist, the properties they own will never be on the market, because they will always have a tenant. They are very small in number and functionally not available to rent, so they don't ruin the scheme.
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You're probably right, if you're talking about California.
I don't get it (Score:2)
ast week, San Francisco passed a first-of-its-kind ordinance banning "both the sale and use of software which combines non-public competitor data to set, recommend or advise on rents and occupancy levels."
Providing information is illegal?
That sounds illegal.
Does the law really say that?
But there are two things the data broker is doing that are probably illegal. First, they're not just harvesting public data on the going rate. They are getting the data directly from the real estate companies: the companies are thereby colluding to keep each other aware of the going rate. That is a very subtle difference. But the second thing that's wrong --- which i totally don't get --- is the data broker being some kind of
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What if they all use the same website to choose their prices and don't talk to each other directly?
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What if they all use the same website to choose their prices and don't talk to each other directly?
They are the ones supplying the data to each other, through the service (web site) dedicated to doing just that. You can look at this three ways: (1) they are talking to each other to collude, and the web site is not implicated because it's just a content-neutral third party like the telephone company (2) since the entire purpose and function of the site is to facilitate specifically these communications, the web site is liable or (3) both the web site and its users are colluding and liable.
It's obviously
It might not matter (Score:2)
Seems fair to me (Score:2)
I just apply the same standards the IRS and all state income taxing authorities that have graduated tax rates. If it's good for them it must be good for me, too.
Of course, if they stop doing it, then so must I. I feel that's the optimum solution, too.
{^_^}
Or have oligarchs (Score:2)
Another way to circumvent corporate malfeasance where laws don't protect is to form an organization