Competition Bureau investigates claims that AI-driven software facilitated rent price-fixing among landlords
The Competition Bureau of Canada has opened an investigation into allegations of price-fixing by major corporate landlords using artificial intelligence software.
The probe, initiated after reports by independent media outlet The Breach, focuses on whether AI-powered tools like YieldStar facilitated coordinated rent increases, raising serious concerns about anti-competitive practices in the housing market.
The investigation detailed how Canadian real estate developer Dream Unlimited and other landlords allegedly used YieldStar, a software accused of creating a "housing cartel."
YieldStar analyzes market data, such as vacancy rates, to generate rent recommendations often above typical market rates. The report said it enables landlords to coordinate rent hikes, squeezing tenants already facing affordability challenges.
The Competition Bureau has not officially confirmed the investigation but emphasized its commitment to protecting competition in the real estate industry. Federal Minister François-Philippe Champagne called the alleged practices “completely unacceptable” and vowed to push for action.
“I am going to write to the competition commissioner today to launch an investigation,” Champagne said after the issue was raised in the House of Commons.
Tenant advocacy groups have played a pivotal role in bringing these issues to light. The York South-Weston Tenant Union delivered over 100 complaints to the Competition Bureau, highlighting the impact of AI-driven rent increases on tenants. Advocacy efforts have already led some landlords, including Dream Unlimited and GWL Realty Advisors, to halt their use of YieldStar amid public backlash.
Geordie Dent, executive director of the Federation of Toronto Metro Tenants’ Associations, hailed the investigation as a victory for tenants.
“If you’re a big landlord in Canada right now, you’re probably not going to consider using YieldStar because there’s just too much heat and too much risk for your corporation,” he said.
While the investigation is a significant step, legal experts warn of hurdles. Jennifer Quaid, a competition law professor at the University of Ottawa, explained that proving cartel behaviour requires evidence of a deliberate plan to fix prices.
“These are really hard cases to investigate, and they’re hard cases to build evidence in,” Quaid said.
Unlike the US Department of Justice, Canada’s Competition Bureau lacks direct criminal enforcement powers. It must collaborate with the Public Prosecution Service of Canada to pursue criminal charges.
Historically, Canadian courts have relied more on fines than jail time for corporate wrongdoing, which some experts argue may not be enough to deter anti-competitive behaviour.
Should evidence of collusion emerge, affected tenants could pursue class-action lawsuits seeking compensation. Advocacy groups have called for stronger enforcement, citing past cases like the bread price-fixing scandal, where companies paid millions in fines but avoided significant structural changes.
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For tenants, the investigation offers a glimmer of hope amid rising rents and housing insecurity. Chiara Padovani, co-chair of the York South-Weston Tenant Union, credited media coverage and tenant organizing for spurring government action.
However, she questioned whether political leaders, particularly the Liberal government, are genuinely committed to tenant protections or merely posturing ahead of elections.
“This is just one more example of how our government’s approach to housing has been completely off target,” Padovani said, adding that partnering with developers and corporate landlords has done little to address the housing crisis.
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