Aug. 23 (UPI) — The Justice Department and eight attorneys general filed a lawsuit against real estate software giant RealPage Inc. for attempting to illegally decrease pricing competition between landlords and deprive renters the benefits of that competition.
The lawsuit, which was filed in North Carolina, charges that RealPages violated the Sherman Act by using its pricing software algorithms that allow landlords to collude on prices to charge more to renters.
Attorneys general in North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington joined the civil antitrust lawsuit. The landlords provide RealPage’s software with “nonpublic, competitively sensitive information” on rental rates, terms, and other information.
“This software then generates recommendations, including on apartment rental pricing and other terms, for participating landlords based on their and their rivals’ competitively sensitive information.”
Prosecutors said that RealPages tries to eliminate independent free market forces that would help give renters more favorable rates and terms for housing.
“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. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rent.”
The complaint said RealPage pitched to the landlord that its software could use a “very possible opportunity to increase prices” and avoid “the race to the bottom in down markets.” RealPage hinted at collusion, telling landlords about the “greater good of in everyone succeeding” versus competing against each other.
The Justice Department said RealPage already owned a monopoly in commercial revenue management software for multi-family dwellings with about an 80% market share.
“RealPage’s egregious, anti-competitive conduct allows landlords to undermine fair prices and limit housing options while stifling necessary competition,” Acting Association Attorney General Benjamin Mizer said in a statement.
“The department remains committed to rooting out illegal schemes and practices aimed at empowering corporate interest at the expense of consumers.”