The recent civil lawsuit brought by the US Department of Justice against RealPage, a Texas-based firm specializing in commercial revenue management software for landlords, sheds light on the allegations of market manipulation within the rental housing industry. The lawsuit claims that RealPage’s algorithm effectively facilitates coordination among landlords by providing suggested pricing based on rental rate and lease terms inputted by clients. This coordination, according to the DOJ, hinders competition and violates antitrust laws.
RealPage’s dominance in the market, controlling around 80 percent of the software used to set prices for approximately 3 million rental units across the country, raises concerns about anti-competitive practices. The lawsuit signifies a significant escalation in legal action against the company, with the DOJ accusing RealPage of utilizing its algorithm to systematically coordinate housing prices and stifle competition. The company’s alleged acknowledgment of the anticompetitive nature of its product further reinforces these claims.
Despite facing multiple lawsuits and the recent civil action by the US DOJ, RealPage vehemently denies any allegations of antitrust violations. The company has gone as far as publishing digital materials and an FAQ page on a public policy website to refute the accusations. RealPage claims that its revenue management software benefits both housing providers and residents, dismissing the claims of market manipulation as “demonstrably false information.”
The legal action taken by the US DOJ marks a significant milestone in addressing algorithm-enabled violations of antitrust laws. While previous cases focused on criminal charges against individuals for price-fixing, this lawsuit targets the algorithm itself as the means of the violation. The lawsuit highlights the growing importance of regulating algorithmic decision-making and its impact on market dynamics.
The allegations against RealPage and its algorithm raise critical questions about the ethics of using automated systems to set prices and coordinate housing rates. The lawsuit underscores the need for robust antitrust enforcement in the digital age, emphasizing the accountability of companies like RealPage in ensuring fair competition and consumer welfare. As the case unfolds, it will be crucial to monitor the implications of algorithmic pricing on the rental housing market and the broader implications for antitrust regulation.