DOJ claims RealPage helped landlords fix rental prices

WASHINGTON – The Justice Department and attorneys general from eight states filed a lawsuit Friday accusing Dallas-based RealPage of collecting confidential information from landlords across the country, which they say made it easier for the company to coordinate and raise prices for millions of renters across the country.

RealPage provides landlords with software to manage 16 million rental properties nationwide, primarily in the Sun Belt and the South. The federal lawsuit filed in North Carolina alleges that RealPage has a monopoly on so-called “revenue management software” for landlords because the company controls 80% of the market nationwide.

The lawsuit alleges that by sharing landlords’ confidential information about rents, leases and vacancy rates, RealPage helps landlords collude to avoid competition and raise prices. Without RealPage’s information and recommendations about the rents competitors are charging and available vacancies, landlords can charge higher prices or avoid concessions like a month’s rent free, the lawsuit says.

“Americans should not have to pay more rent just because a company found a new way to work with landlords and break the law,” said Attorney General Merrick Garland.

RealPage did not immediately respond to a request for comment.

RealPage processes the information using algorithmic pricing software that generates recommendations for rental prices. The lawsuit cited examples of how RealPage and landlords allegedly used the information they shared.

A RealPage executive told a landlord that using competitor data could help identify where a landlord “may need to increase by $50 per day instead of $10,” the lawsuit says.

The lawsuit also quotes a landlord describing RealPage’s software. “I’ve always liked this product because your algorithm uses proprietary data from other subscribers to suggest rent and term,” the landlord said. “This is classic price fixing.”

“The implications of this conduct are far-reaching,” said Assistant Attorney General Jonathan Kanter, head of the department’s antitrust division. “As Americans struggle to afford housing, RealPage is making it easier for landlords to collude to raise rents.”

Garland said housing costs are the largest monthly expense for Americans, and the alleged collusion between RealPage and landlords is keeping prices higher than they otherwise would have been.

“Everyone knows the rent is damn high, and we argue that’s one of the reasons why,” Garland said.

More: “Great” misconduct? Antitrust lawsuit against Google is not the only big name in court

First algorithm-based antitrust lawsuit

Justice Department officials said this was the first civil case in which the government alleged that an algorithm was the method used in the alleged violation of federal law. Kanter hired data scientists and researchers to investigate allegations of this type of technological collusion, and the lawsuit was the result of a nearly two-year investigation.

“By feeding sensitive data into a sophisticated algorithm powered by artificial intelligence, RealPage has found a modern way to violate a centuries-old law through the systematic coordination of rental prices — and undermine competition and fairness for consumers in the process,” said Assistant Attorney General Lisa Monaco. “Training a machine to break the law is still breaking the law.”

States involved in the lawsuit are: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington.

Biden’s antitrust agenda in the Justice Department

The lawsuit is the Justice Department’s latest fight against corporate consolidation since President Joe Biden took office, which the government says limits consumer choice and drives up prices.

A federal court ruled on August 5 that Google illegally exploited its superiority as a search engine to monopolize online searches and thus suppress competition.

The agency sued Live Nation Entertainment, Ticketmaster’s parent company, in May, alleging that it has monopolized live events. The goal of the lawsuit is to lower prices for fans and open the doors of venues to more musicians.

The ministry filed a lawsuit against Apple in March, accusing the company of monopolizing the smartphone market. This makes it more difficult for consumers to change phones, hinders innovation and imposes higher costs on developers and companies.

Vice President Kamala Harris, the Democratic presidential candidate, recently announced a plan to combat high housing prices by building three million additional homes.

First algorithm-based antitrust lawsuit

Biden’s antitrust agenda in the Justice Department

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