Uncle Sam accused a tech tool of scheming to help your landlord finally make the transition to premium cigars at your expense. Yesterday, the Justice Department and the attorneys general of eight states sued RealPage, an apartment-pricing tool widely used by corporate landlords, alleging that it lowers competition by allowing property owners to coordinate higher rents.

The case is the first major attempt by antitrust authorities to litigate how tech tools can abet price manipulation.

Rent-juicing machine

The government’s suit centers on RealPage’s YieldStar software, which suggests what pro landlords should charge tenants.

• The suit says the software’s algorithmic pricing recommendations are based on confidential data that RealPage hoovers up from landlords, like rent discounts, lease status, and other sensitive rental agreement details.
• The government alleges the company pushes property owners to charge higher rents and discourages them from responding to market conditions with discounts. The complaint notes that many landlords use the “auto accept” option to make the software’s suggestion the default rent.

As a smoking gun, the DOJ cited RealPage’s marketing material, which boasts about helping landlords avoid “trying to compete against one another in a way that actually keeps the entire industry down” and one customer praising the product as “classic price fixing.”

The DOJ also accused RealPage of using its tech to become a monopolist that controls 80% of the multifamily property revenue management market.

Private equity-owned RealPage denied all accusations, saying its software is built to be legally compliant and it had worked to show the DOJ that in the past. The company has also previously pointed out that landlords take its price recommendations less than half the time.

Close to home

The lawsuit dropped at a time when “housing costs” remain trigger words for many Americans, with the median rent this spring measuring 22% higher than in 2020, according to rent.com. The case echoes Vice President Kamala Harris’s recent campaign promise to push for a law that cracks down on commercial landlords using algorithms to jack up prices.

It’s not just about rent: The Federal Trade Commission recently began studying how companies use customer data to set prices across industries.—SK

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JPow said “the time has come” for interest rate cuts. Federal Reserve Chair Jerome Powell gave the people what they wanted in his speech at Jackson Hole yesterday, all but guaranteeing that the central bank will start bringing interest rates down in September. Acknowledging that inflation has come down and stressing concerns about the cooling labor market, Powell said, “The time has come for policy to adjust.” But the big question remains of how big a cut and, true to form, Powell’s speech didn’t offer specifics or drop hints.

RFK Jr. suspends campaign and backs Trump. The independent presidential candidate, who made headlines during his campaign for biographical details like having found a parasitic worm in his brain and having dumped a bear carcass in Central Park, said he was suspending his campaign after polls showed his bid harming Donald Trump and helping Kamala Harris. Robert F. Kennedy Jr. said he did not see “a realistic path to electoral victory in the face of this relentless, systematic censorship and media control.” However, he noted that he was suspending, not ending, his campaign and urged his supporters in non-swing states to vote for him.

Canada’s freight trains start running…but may stop again. Canadian freight trains started moving again yesterday morning following a lockout of 9,000 workers after the government forced the country’s two major rail companies into arbitration with the workers’ union, the Teamsters. But the union said it plans to challenge the arbitration order, and it issued a notice to Canadian National Railway, one of the two companies, that workers plan to strike on Monday. The potential strike again raises the specter of an economically damaging hit to supply chains, as the union and the companies argue over wages and worker safety.

The place you go to bond with your dad is in worse shape than Rory McIlroy on a Sunday afternoon. Topgolf’s shares sank to a nine-month low yesterday on the news that investment bank Raymond James slashed its rating to, basically, “avoid” a few weeks after the company reported earnings that spooked investors.

Some backstory: Golf club-maker Callaway bought Topgolf in a deal that valued part of the chain at $2 billion in 2020, but its stock has fallen 40% since the merger. Earlier this month, the company reported disappointing second-quarter revenue, with same-venue sales down 8% from a year ago.

It’s time to lay up. Raymond James analyst Joseph Altobello advised investors to sell the company’s shares since, like many LIV tournaments, Topgolf struggles to bring in traffic. That recommendation came after the company said it was conducting a “strategic review,” including a potential spinoff of its driving range business, in the wake of the poor earnings report.

But…that spinoff might be too little, too late, and even impossible. Topgolf has an estimated $2.4 billion debt load, according to Altobello, making it an unattractive prospect to potential buyers like Dave & Buster’s or Bowlero.—CC

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A complete list of the former bird app’s minority co-owners was unsealed for the first time since Elon Musk took it private in 2022, the Washington Post reported this week. Now we know exactly whose wallet suffers every time something goes wrong.

Unmasked: Court filings named the foundation of hedge fund billionaire and vocal X user Bill Ackman, as well as Sean Combs Capital…Diddy’s fund. Many others on the list were already known for contributing to Musk’s $44 billion purchase of Twitter or his other businesses, including:

• Silicon Valley VC firms Andreessen Horowitz, Sequoia Capital, and 8VC, which was co-created by a Palantir founder.
• Binance and Fidelity, which now holds stakes through nearly 30 separate entities.
• Former Twitter CEO Jack Dorsey, who’s criticized Musk’s leadership since the takeover, and Oracle founder Larry Ellison.
• Saudi Prince Alwaleed bin Talal (net worth: $19 billion).

No regrets? The Twitter takeover is officially the worst financing deal for banks since the 2008 financial crisis, the Wall Street Journal reported earlier this week. X lost nearly three-quarters of its value from takeover time to this past January, and nobody is buying $13 billion in “hung” loans that are sinking financial institutions’ balance sheets. Still, Musk has so many businesses under his umbrella that banks may be willing to stay in it for the long haul.—ML

In news that would delight the villain from The Rescuers, the second-largest diamond ever was found in Botswana this week. The not-yet-named stone clocks in at 2,492 carats, making it the biggest diamond found in 119 years. For context: The average engagement ring in the US is one carat. But it’s still shy of the record, which is held by the 3,106-carat Cullinan Diamond unearthed in South Africa in 1905. The newly discovered diamond hasn’t been priced yet, but the previously ranked second-biggest diamond (1,111 carats), found in the same Botswana mine, sold for $53 million in 2017.