The U.S. Department of Justice (DOJ) has filed a civil antitrust lawsuit today against RealPage Inc., the Richardson, Texas-based property management software company, claiming it masterminded an “unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.”
The DOJ alleged that RealPage encouraged loyalty to its algorithm’s recommendations that allegedly maximized price increases and minimized price decreases. RealPage was also accused of training landlords to limit concessions and other discounts to renters. The lawsuit insisted that RealPage commands about 80% of the property management software for multifamily dwellings.
Joining the DOJ in the lawsuit were the Democratic attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington.
“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,” said Attorney General Merrick Garland in a statement. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents. Using software as the sharing mechanism does not immunize this scheme from Sherman Act liability, and the Justice Department will continue to aggressively enforce the antitrust laws and protect the American people from those who violate them.”
RealPage did not publicly comment on the lawsuit.
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Capitalism is awesome WHEN IT IS REGULATED! Thank you to the DOJ
Interesting that the Government itself, through raising allowable HUD rents and publishing those rates to landlords, itself inflates the cost of all apartments. Consider that everyone who does not have a government subsidy must rise to the subsidized rates to be able to compete. HUD hasn’t defaulted yet. But many struggling lower income families are harmed terribly by the government by virtue of only a few candidates having Voucher buying power. While the published rate sheets offered to landlords by Housing Agencies are not algorithms, they indeed set a government supported floor to housing costs at the low end of the market.
Whens the lawsuit against the DRE for allowing their licensed agents to manipulate markets via pocket listings sold to friends and family below market rates? The comparable sales from these sold pocket listings affect neighboring homes
Wouldn’t it be better to let the market determine rents? Those who set their rents too high will soon learn that no one wants to rent their properties. The property owners might be greedy vultures, or maybe compassionate people just trying to make a living. Rents can only be increased to what the market will bear. Regulation via governments always makes a mess of any industry.
I agree with Pat Loftus. In today’s society, with a socialist leaning bureaucrats and ignorant media, one could expect nothing less. We have used this system from its inception by the original creators of the program (i.e., before Rent Roll and Real Page were formed). The company that started this began with only 2 individuals. It was then, and remains, a terrific program. The government, as usual, either doesn’t understand the program, or they are looking for ways to damage private enterprise.
I find it interesting that the government didn’t file a similar lawsuit against other companies in the industry. Guess it is too much work for the lazy government attorneys.