What are the details of the allegations?
The US Department of Justice (DOJ) has filed a civil lawsuit against RealPage, a Texas-based real estate software company, accusing it of conspiring with landlords to artificially inflate rents across the country. In the complaint, filed on Friday, the DOJ alleged that RealPage’s algorithm, which uses non-public data from landlords, suppresses competition in the rental market, leading to higher rents for millions of Americans.
The recommendations made through RealPage’s software, according to the DOJ, enable landlords to coordinate rent increases, violating antitrust laws. Attorney General Merrick Garland emphasized the severity of the allegations, stating: “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.”
The DOJ argued that RealPage’s practices undermine the principles of a competitive market. By sharing sensitive data among landlords, the company’s software enabled them to align their rent prices, which limits the options available to renters and inflates costs nationwide. Garland added: “The rent is too damn high, and this is one of the reasons why.”
A bid to protect renters
A CNN report highlighted that the lawsuit represents a unique case in antitrust law, as it focuses on the use of an algorithm to facilitate anti-competitive behavior. DOJ officials described the case as a modern twist on a classic form of market manipulation. While the method may be new, the violation is “one of the oldest in the book,” a DOJ official remarked.
RealPage’s software is reportedly used to manage three million rental units across the United States, with a significant concentration in Southern states. The company’s tool is particularly prevalent among corporate landlords, who control large portfolios of rental properties. The DOJ expressed concern over the broader impact of these practices, noting that corporate landlords often evict tenants at higher rates and can leverage software like RealPage’s to increase profits at renters’ expense.
The lawsuit also highlighted RealPage’s dominant position in the market for rental management software. The DOJ alleged that the company uses its extensive data collection to maintain a monopoly, further limiting competition and reinforcing its influence over rental prices.
“In a free market, these landlords would otherwise be competing independently to attract renters based on pricing, discounts, concessions, lease terms, and other dimensions of apartment leasing,” the DOJ stated.
The outcome of this lawsuit could have significant implications for both the real estate industry and renters nationwide.
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