Canada’s industry minister, Francois-Philippe Champagne, has called on the Competition Bureau to investigate whether Canadian landlords are using AI software in rent-fixing schemes. This action comes after reports emerged of corporate landlords using software called YieldStar to set rental prices higher than naturally competitive rates. Champagne urged the Competition Bureau to utilize tools within the Competition Act to investigate the use of algorithmic pricing in the rental market. This request follows similar calls from the NDP in September, prompted by an antitrust lawsuit in the U.S. that alleged real estate company RealPage Inc., which owns YieldStar, was involved in an illegal scheme to coordinate rental price increases.
The U.S. Justice Department filed a lawsuit against RealPage Inc. in August, accusing the company of violating antitrust laws through its algorithm that allows landlords to coordinate rental prices for millions of apartments across the country. Canadian reports cited statements from the company denying the allegations made by American law enforcement. Champagne emphasized in his letter that the federal government supports the use of new technologies but will take action to protect Canadians from technologies that seek to take advantage of them and disempower them. The Competition Bureau confirmed receipt of Champagne’s letter regarding alleged price-fixing and collusion by corporate landlords using YieldStar, but could not confirm if an investigation would be conducted due to confidentiality.
The Competition Bureau stated that they must conduct a thorough examination of the facts before determining if the Competition Act has been violated. If evidence of activities that raise concerns under the law is found, the Bureau will take action. The latest rental report from Rentals.ca and Urbanation showed that average asking rents rose by 2.1% year-over-year, the lowest rate since October 2021. However, smaller markets were experiencing upward pressure on rents, potentially contributing to affordability concerns in smaller cities. The investigation into the use of AI software like YieldStar in rent-fixing schemes aims to ensure fair and competitive rental markets for Canadians.
The use of AI software in the rental market has raised concerns about potential price-fixing by landlords using algorithms to set rental prices above naturally competitive rates. Francois-Philippe Champagne’s call for an investigation by the Competition Bureau follows reports of corporate landlords employing software like YieldStar to coordinate rental price increases. This issue has attracted attention from Canadian lawmakers and regulators seeking to ensure that new technologies are not leveraged to manipulate rental prices and disadvantage consumers. The investigation into these alleged rent-fixing schemes aims to protect the competitive nature of the rental market and promote fair pricing for tenants across Canada.
The lawsuit filed by the U.S. Justice Department against RealPage Inc. in August alleged that the company’s algorithm enabled landlords to coordinate rental price hikes, violating antitrust laws. While the company denied the accusations made by American law enforcement, the allegations have sparked concerns about the use of AI software to influence rental prices. Champagne’s letter to the Competition Bureau emphasized the government’s support for new technologies but highlighted the need to prevent their misuse to exploit consumers. The Competition Bureau’s commitment to thoroughly examining the facts and taking action if violations of the Competition Act are found reflects the importance of ensuring a fair and transparent rental market for Canadians.
The rental market in Canada has seen an increase in average asking rents, with some smaller markets experiencing upward pressure on rental prices. This trend, combined with the use of AI software by landlords, has raised affordability concerns for tenants, particularly in smaller cities. The investigation into the alleged use of AI software in rent-fixing schemes aims to address these concerns and ensure that Canadians have access to fair and competitive rental prices. By calling on the Competition Bureau to probe into this issue, Champagne and other lawmakers are taking steps to protect consumers and uphold the integrity of the rental market in Canada.
