Competition Bureau Investigating If AI Is Being Used to Price-Fix Rental Rates

A "for rent" sign outside a home in Toronto on July 12, 2022. Cole Burston/The Canadian Press

Canada’s Competition Bureau says it is looking into whether artificial intelligence (AI) tools are being used by landlords to set higher rental prices.

AI price-fixing involves real estate companies using tools and software that track what competitors are charging for rents.

“If we find evidence of activities that could raise concerns under the law, we will take action,” Bureau spokesperson Cloe Bouchard said in an emailed statement.

It is an issue the federal NDP have previously raised, and MP Bonita Zarrillo introduced Bill C-423 last December, part of which is related to price-fixing by landlords. The bill was given first reading on Dec. 11.

South of the border, the U.S. Department of Justice has filed a lawsuit against RealPage, which has been accused of using AI to recommend prices to landlords in several states.

The company denies the claims, calling them “false and misleading” on a website it launched to respond to accusations going back to 2022.

Zarrillo said the NDP has heard from Canadians who say landlords on this side of the border are using similar tools.

“We started to investigate, and what we found out was artificial intelligence software is available to these corporate landlords to fix pricing,” she said during an Oct. 31 news conference.

“We’ve heard from from tenants that they have heard that their landlords are using this price-fixing tool. We’ve heard from tenants that it’s up to 15 buildings that they know of where it’s being used, 15 landlords that it’s being used by.”

Some NDP members wrote a letter to the competition bureau asking for an investigation, according to Zarillo. She also said she brought up the issue up twice to a parliamentary committee, but nothing happened.

During the news conference, she called for an investigation into the matter.

“We want to know how widespread is this in Canada,” she said.

In October last year, Innovation Minister Francois-Philippe Champagne said he’d write to the Competition Bureau to request an investigation.

The U.S. lawsuit against RealPage was filed in August 2024. The U.S. Justice Department has since amended its lawsuit to include six more corporate landlords it alleges participated in a price fixing scheme.

The lawsuit alleges that some landlords have been sharing “competitively sensitive information” about apartment rental rates with RealPage to train and run the algorithmic pricing software.

The software then makes suggestions for landlords on prices, based on the information it received.

RealPage has also been accused of using a substantial data trove to maintain a monopoly in the market for commercial revenue management software. The Justice Department said it wanted to restore competition for renters in states across the country.

RealPage’s software tends to maximize price increases, minimize price decreases, and maximize landlords’ pricing power. RealPage also trained landlords to limit concessions (e.g., free month(s) of rent) and other discounts to renters, the government said.

In response to the allegations, the Texas-based company said it has not violated antitrust laws.

”RealPage’s revenue management software is purposely built to be legally compliant, enhances competition throughout the rental housing ecosystem and is highly configurable by our customers,” it said.

RealPage also said that customers can accept or reject pricing recommendations.

The RealPage lawsuit was mentioned in a recent Competition Bureau report on AI use in Canada.

In its report released in January, the Competition Bureau noted a complaint filed in the United States on Sept. 9, 2023, alleging that property managers in the multifamily housing market were “outsourcing” pricing and supply decisions to an algorithm.

The Canadian Press contributed to this article.