The Justice Department filed an antitrust lawsuit Friday against RealPage, a provider of property management software, alleging that RealPage facilitated a collusion effort among landlords to inflate rents for millions of Americans.
The complaint alleges that the Richardson, Texas-based company and its competitors engaged in a price-fixing scheme by sharing nonpublic, sensitive information that RealPage’s algorithmic pricing software used to generate price recommendations. The company replaced competition with lease coordination to the detriment of tenants across the U.S., the complaint alleges, and monopolized the market through its revenue management software, which was used by landlords to determine rent costs.
The DOJ is joined by the attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington. The complaint alleges that RealPage violated Sections 1 and 2 of the Sherman Act, an antitrust law.
“Americans shouldn’t have to pay more rent because a company found a new way to manage rent.
with landlords to violate the law,” Attorney General Merrick B. Garland said in a statement Friday. “We allege that RealPage’s pricing algorithm allows landlords to misappropriate confidential, competitively sensitive
information and their rental prices. Using software as the sharing mechanism does not immunize these
Sherman Act liability regime, and the Justice Department will continue to aggressively enforce
the antitrust laws and protect the American people from those who violate them.”
According to Deputy Attorney General Lisa Monaco, RealPage broke a centuries-old law in a modern way by using an AI-based algorithm to coordinate rents, “undermining competition and fairness for consumers.”
“Training a machine to break the law is still breaking the law. Today’s action makes clear that we will use all of our legal resources to hold technology-driven anti-competitive behavior accountable,” she said in a statement.
RealPage claims the allegations against it are false and insists RealPage customers set their own rental rates and can reject the algorithm’s recommendations. The company added that it uses data responsibly.
“RealPage’s revenue management software was purposefully designed to comply with the law, and we have worked constructively with the Department of Justice in the past to demonstrate that,” a company spokesperson said in a statement to CBS News.
The lawsuit comes at a time when Americans are struggling to afford basic necessities like housing and groceries, and high home prices are contributing to persistent inflation.
“As Americans struggle to afford housing, RealPage makes it easier for landlords to raise rents,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today, we filed an antitrust lawsuit against RealPage to make housing more affordable for millions of people across the country. Competition — not RealPage — should determine what Americans pay to rent their homes.”
RealPage acknowledged that its product was designed to maximize profits for landlords, the lawsuit said, describing it as “taking every possible opportunity to raise prices.”
One landlord praised RealPage’s software, saying he liked it because the algorithm “uses proprietary data from other subscribers to suggest rental rates and terms. That’s classic price fixing…”
— CBS News’ Robert Legare contributed reporting
