The US Department of Justice, along with eight US states, recently filed a civil lawsuit against Texas-based RealPage, a property management software company. The lawsuit alleges that RealPage employs algorithms to enable collusion among landlords, which ultimately harms renters across various US markets. According to the Department of Justice, RealPage has a monopoly over commercial revenue management software, which allows landlords to charge more than they otherwise would, negatively impacting consumers.
RealPage has vowed to vigorously fight the antitrust charges, labeling them as groundless. The company believes that the lawsuit is a distraction from the fundamental issues driving rental inflation, such as a lack of housing supply and high mortgage rates. RealPage is disappointed that the Department of Justice has chosen to pursue this lawsuit, as they believe their technology has been used responsibly for years and has contributed to healthy competition in the market.
This lawsuit marks the first time that US prosecutors have targeted anticompetitive behavior centered on computer algorithms. Assistant Attorney General Jonathan Kanter highlighted the importance of technology in uncovering such behavior and its impact on the competitive process. RealPage’s algorithmic software, which processes real-time pricing inputs and sensitive non-public data from competing landlords, is accused of allowing landlords to collude and charge higher prices, ultimately harming renters.
Attorney General Merrick Garland described RealPage’s conduct as classic price fixing and emphasized the importance of competition among landlords in protecting renters. The lawsuit claims that RealPage’s dominance in certain markets, such as Raleigh, North Carolina, where they account for 40% of the rental market, is detrimental to consumers. RealPage’s presence in the US Sunbelt and South regions further exacerbates the impact of their alleged anticompetitive behavior on renters.
The antitrust charges against RealPage shed light on the use of algorithms in promoting collusion among landlords and harming renters in the US market. The Department of Justice’s lawsuit marks a significant step in targeting anticompetitive behavior driven by technology. RealPage’s response to the lawsuit underscores the company’s commitment to defending its practices and the role of technology in fostering competition. The outcome of this legal battle will have far-reaching implications on the rental market and the use of algorithms in the real estate industry.