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Friday, August 23, 2024

U.S. govt files antitrust lawsuit against software company RealPage over landlords’ collusion to hike rents

The lawsuit alleges that RealPage participated in a price-fixing conspiracy that boosted rents beyond market forces for millions of people through its software.

• August 23, 2024
RealPage
RealPage[Credit: CNN]

The United States government has filed an antitrust lawsuit against real estate software maker RealPage over allegations that the company concluded with landlords to raise rents across the country.

In the suit filed by the Department of Justice in the Middle District of North Carolina and joined by North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington, the government accused RealPage of facilitating market conspiracy.

According to the New York Times, the lawsuit alleges that RealPage participated in a price-fixing conspiracy that boosted rents beyond market forces for millions of people through its software, which allowed landlords to hike rents across the U.S.

The lawsuit against RealPage marks a landmark as the first major civil antitrust case where the role of an algorithm in pricing manipulation is central to the case, Justice Department officials said.

“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,” Attorney General Merrick Garland said in a statement.

The Times reported that RealPage’s software, Yieldstars, allowed subscribed landlords to access confidential real estate information about rents and occupancy gathered by the software.

Subsequently, this algorithm generates suggestions about the amount landlords should charge rent, a scheme now at the centre of the U.S. government.

Responding to the latest development, a RealPage spokeswoman, Jennifer Bowcock, said the company’s revenue management software was “purposely built to be legally compliant.”

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