The Justice Department is suing the company, which developed widely used software to help landlords set rents. RealPage’s rental recommendation algorithm allegedly drove up prices and “deprived tenants of the benefits of competition on apartment lease terms.”
In the complaint, the Justice Department and eight states claim RealPage obtains non-public rental price information from competing landlords who use the software. RealPage then allegedly feeds that information into its algorithmic pricing software, which landlords can use to get recommendations on rental rates.
As the lawsuit alleges, “these were more than just ‘suggestions,'” RealPage also “reviewed and weighed landlords’ other policies” in which it sought to end concessions and discounts for tenants. Landlords can also “effectively agree to outsource their pricing functions” to RealPage and provide an “auto-accept” option to automatically adjust rents based on its algorithms.
“In a competitive market, each landlord can independently decide to offer concessions in order to better attract lessors,” the complaint states. “However, RealPage again seeks to substitute collective action for entirely independent competitive decisions by terminating concessions. ”
In addition, the Justice Department claims that RealPage maintains a monopoly in multifamily commercial revenue management software, holding approximately 80% of the market. The lawsuit alleges that RealPage’s “illegal agreements” with landlords and the sensitive data it received from landlords gave the company a competitive advantage. edge RealPage was contacted for comment but did not receive an immediate response.
