The Justice Department on Friday filed an antitrust lawsuit against property management software provider RealPage, which allegedly facilitated a collusion among landlords to raise 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 non-public, sensitive information. The company consolidated rent competition and harmed renters across the U.S., according to the lawsuit, by monopolizing the market through its revenue management software, which was used by landlords to drive up rental costs.
The attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington have joined the DOJ. RealPage alleges antitrust violations of Sections 1 and 2 of the Sherman Act.
“A company has found a new way to plan so Americans don’t have to pay more for rent
with Landlords must break the law,” Attorney General Merrick P. Garland said in a statement Friday. “We allege that RealPage’s pricing mechanism enables landlords to share confidential, competitively sensitive information and adjust their rents. The use of software as a sharing mechanism does not insulate the program from Sherman Act liability, and the Department of Justice will continue to vigorously enforce antitrust laws and protect the American people from those who violate them.”
Deputy Attorney General Lisa Monaco said RealPage violated a century-old law in a modern way, using an AI-powered algorithm to adjust rental prices, “undermining competition and fairness for consumers in the process.”
“Training a machine to break the law is still breaking the law. Today’s action makes clear that we will use all our legal tools to ensure accountability for anti-competitive behavior fueled by technology,” he said in a statement.
RealPage says the allegations against the company are false, and insists that RealPage customers decide their own rental prices and can reject algorithmic recommendations. The company added that it will use the data responsibly.
“RealPage’s revenue management software is intentionally built to be legally compliant, and we have a history of working constructively with the DOJ to show that,” a company spokesperson said in a statement to CBS News.
As Americans struggle to afford necessities ranging from housing to groceries, higher housing costs continue to contribute to inflation.
“As Americans struggle to afford homes, RealPage makes it easier for homeowners to consolidate to raise rents,” said Jonathan Kanter, Assistant Attorney General of the Justice Department’s Antitrust Division. “Today, we filed an antitrust lawsuit against RealPage for making housing more affordable for millions of people across the country. Competition — not RealPage — should decide what Americans pay to rent their homes.”
RealPage acknowledged that its product is designed to maximize profits for landlords, describing it as “driving every possible opportunity to increase prices”.
One landlord praised RealPage’s software because the algorithm “uses proprietary data from other subscribers to recommend rents and durations. It’s a classic pricing tool…”
— CBS News’ Robert Legere contributed reporting
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