The Justice Division on Friday filed an antitrust lawsuit in opposition to RealPage, a property administration software program supplier, alleging it enabled a collusion amongst landlords to inflate rents for hundreds of thousands of Individuals.
The criticism claims the Richardson, Texas-based firm and its rivals engaged in a price-fixing scheme by sharing nonpublic, delicate data, which RealPage’s algorithmic pricing software program used to generate pricing suggestions. The corporate changed competitors with hire coordination to the detriment of renters throughout the U.S., in response to the swimsuit, monopolizing the market by means of its income administration software program which was utilized by landlords to find out hire prices.
The DOJ is joined by the attorneys common of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington. The criticism alleges that RealPage violated sections 1 and a couple of of the Sherman Act, an antitrust legislation.
“Individuals shouldn’t must pay extra in hire as a result of an organization has discovered a brand new strategy to scheme
with landlords to break the legislation,” Lawyer Basic Merrick B. Garland mentioned in a press release Friday. “We allege that RealPage’s pricing algorithm allows landlords to share confidential, competitively delicate data and align their rents. Utilizing software program because the sharing mechanism doesn’t immunize this scheme from Sherman Act legal responsibility, and the Justice Division will proceed to aggressively implement the antitrust legal guidelines and defend the American individuals from those that violate them.”
Deputy Lawyer Basic Lisa Monaco mentioned RealPage violated a century-old legislation in a contemporary manner, by utilizing an AI-powered algorithm to coordinate hire costs, “undermining competitors and equity for customers within the course of.”
“Coaching a machine to interrupt the legislation remains to be breaking the legislation. At present’s motion makes clear that we are going to use all our authorized instruments to make sure accountability for technology-fueled anticompetitive conduct,” she mentioned in a press release.
RealPage claims the allegations in opposition to the corporate are false, and insists that RealPage prospects resolve their very own hire costs and might reject the algorithm’s suggestions. The corporate added that it makes use of knowledge responsibly.
“RealPage’s income administration software program is purposely constructed to be legally compliant, and we have now a historical past of working constructively with the DOJ to point out that,” a spokesperson for the corporate mentioned in a press release to CBS Information.
The lawsuit comes as Individuals wrestle to afford requirements from housing to groceries, with excessive housing prices contributing to persistent inflation.
“As Individuals wrestle to afford housing, RealPage is making it simpler for landlords to coordinate to improve rents,” mentioned Assistant Lawyer Basic Jonathan Kanter of the Justice Division’s Antitrust Division. “At present, we filed an antitrust swimsuit in opposition to RealPage to make housing extra reasonably priced for hundreds of thousands of individuals throughout the nation. Competitors – not RealPage – ought to decide what Individuals pay to hire their properties.”
RealPage acknowledged that its product was designed to maximise earnings for landlords, in response to the swimsuit, by describing it as “driving each doable alternative to extend value.”
A landlord praised RealPage’s software program, saying the preferred it as a result of the algorithm “makes use of proprietary knowledge from different subscribers to counsel rents and time period. That is traditional value fixing…”
— CBS Information’ Robert Legare contributed reporting
