The Case for Active Antitrust Enforcement in Alabama

In late May, the Department of Justice (DOJ) and 30 states sued Live Nation-Ticketmaster. The lawsuit alleged that Live Nation-Ticketmaster used its disproportionately large market share (monopoly) to engage in anticompetitive conduct, including retaliatory actions against potential market entrants and non-cooperating venues, and the collection of a “Ticketmaster tax,” in which the base cost of a ticket increases dramatically with the addition of hidden fees in areas where Ticketmaster does not have effective competition.

Of the 30 state attorneys general who joined the DOJ in suing Live Nation-Ticketmaster for such conduct, Alabama’s Steve Marshall was not among them. Many of the attorneys general who joined came from other southern, conservative states, including Texas, Arkansas, Oklahoma, Florida and South Carolina. So why, from an outside perspective, did Steve Marshall leave Alabama, a state with a burgeoning live events industry and a rich musical heritage?

This is just the latest instance in which Attorney General Steve Marshall’s office has neglected to join and file antitrust lawsuits over the past two years. Examples of lawsuits that Alabama could join or even file include lawsuits against companies in the agriculture, technology (Amazon, Apple, Google), transportation and even pharmaceutical industries. In fact, according to the National Association of Attorneys General’s Antitrust Litigation Database, Alabama is one of only six states that has not filed or joined any antitrust lawsuits in the past four years.

When state and federal governments do not take an active role in enforcing competition, it can lead to a situation in which a handful of companies have excessive control over the market. With less competition and more market power, companies can engage in price fixing and collusion, lock out new entrants (discouraging innovation), and use their stronger bargaining power to raise prices, lower service and quality standards, all while making a profit. Sound familiar to Ticketmaster? Across America, we have seen consolidation in various industries, which has caused inflation in the price of groceries and price increases in healthcare, pharmaceuticals, airlines, and oil, among others.

Under Biden, the Federal Trade Commission (FTC) and the Justice Department’s Antitrust Division have undertaken the largest enforcement in decades. But as the number of conservative states that have joined their legal efforts shows, more active enforcement is not an entirely partisan effort. Josh Hawley, R-MO, co-sponsored legislation with Elizabeth Warren, D-MA, to prevent monopolies at airport gates and in the meatpacking industry. J.D. Vance, R-OH, said that Lina Khan, Biden’s appointee to chair the FTC, “is doing a pretty good job.” Matt Gaetz, R-FL, and former Rep. Ken Buck, R-CO, also praised Lina Khan and the FTC’s enforcement efforts.

Yet, despite bipartisan support, Steve Marshall and the Alabama Attorney General’s Office have failed to take action against big business. Instead, Marshall has embroiled himself in culture war controversies and disputes (Birmingham statue, out-of-state abortions). Instead of these petty pursuits, Steve Marshall and his office should focus on protecting Alabamians and consumers from the harmful monopolies that affect them every day. Steve Marshall should start with the easy targets, investigating and suing RealPage for algorithmic rent pricing.

RealPage is a software company that provides YieldStar, a service that helps landlords set housing prices. RealPage has come under fire and investigation for promoting collusion in the marketplace and, in their own words, “making you go places you wouldn’t go if you didn’t use this service.” It works by taking confidential and secret data from every customer in their apartment complexes. RealPage then feeds that data into its algorithm, which analyzes data from all of its users (including competitors) and spits out the rent that should be collected. If we replace the word software with “a guy named Bob,” accessing and using every competitor’s proprietary information to set prices would be blatant collusion. Because of this tacit collusion and flat rent increases, cities where RealPage sets the majority of their housing prices have seen drastic increases in rent.

Both Alabama as a whole and Tuscaloosa have seen rent prices rise at rates that far outpace the rest of the country. While there are likely many factors at play, RealPage is certainly one of them. In Tuscaloosa, the parent companies of apartments including The Cottages, East Edge, Union on Frank, The Lofts and Union Tuscaloosa have been named in lawsuits for using RealPage or have admitted to doing so.

RealPage has been sued by the District of Columbia and Arizona, their offices have been raided by the FBI, and a DOJ lawsuit is likely imminent. Steve Marshall and his office need to get their act together and make up for the lost opportunity with the Ticketmaster lawsuit. Then they need to move forward, exploring other areas of market consolidation that exist in the state to protect consumers, promote innovation, and ensure Alabama’s bright economic future.