Court ruling strengthens DOJ case against algorithmic collusion

The judge allows the antitrust claims against Yardi Systems.

HPE’s $14 billion Juniper deal is under scrutiny as the DOJ claims it threatens competition in the US networking market.

A federal court ruling on December 4 has bolstered the Justice Department’s (DOJ) position that algorithm-driven price-fixing constitutes a clear antitrust violation. Judge Robert S. Lasnik of the US District Court for the Western District of Washington ruled that claims against Yardi Systems Inc., a property management software firm, could proceed under the “per se” theory of antitrust law. This theory automatically deems certain actions, like price-fixing, illegal without requiring additional proof of harm.

The case alleges that Yardi’s RENTmaximizer tool facilitated collusion among property managers to inflate rents. The decision marks a significant departure from earlier rulings where similar claims involving pricing algorithms were dismissed. Experts see this as a pivotal moment for antitrust litigation, enabling plaintiffs to pursue cases by demonstrating that shared algorithm use facilitated price collusion.

This ruling aligns with the DOJ’s broader push against anticompetitive practices in algorithm-driven pricing, a growing area of concern across industries like home rentals and hospitality. While the decision strengthens the DOJ’s stance, legal experts anticipate continued debates over whether traditional antitrust principles can adapt to emerging technologies, signaling years of legal uncertainty ahead.