The Justice Department, along with eight states, has filed a lawsuit against RealPage, the company behind a popular software used by landlords to set rental prices. The complaint alleges that RealPage’s rent recommendation algorithm manipulates prices and diminishes competition in the market for apartment leasing terms. According to the lawsuit, RealPage collects nonpublic rental price information from competing landlords who utilize the software, then uses this data to provide pricing recommendations to landlords. These recommendations are not merely suggestions, as RealPage also influences landlords’ other policies, such as eliminating concessions and discounts for renters.
Monopoly Allegations
In addition to controlling landlords’ pricing decisions, the DOJ claims that RealPage holds a monopoly in the commercial revenue management software sector for multi-family properties, with an estimated 80 percent market share. The lawsuit asserts that RealPage’s agreements with landlords and access to their confidential data give the company an unfair advantage in the market. By offering an “auto accept” feature that automatically adjusts rents based on its algorithm, RealPage effectively eliminates independent decision-making by landlords, leading to reduced competition and higher rental prices for tenants.
The allegations against RealPage raise significant antitrust concerns regarding its dominance in the market for rental pricing software and the impact of its practices on competition and consumer welfare. By controlling landlords’ pricing strategies and influencing market behavior, RealPage may be restricting consumer choice and driving up rental costs for tenants. The lawsuit highlights the importance of maintaining a competitive marketplace where businesses can operate freely and consumers can benefit from a wide range of options and competitive pricing.
RealPage has been under scrutiny by the DOJ for some time, and this lawsuit represents a significant escalation of the government’s efforts to address alleged anticompetitive behavior in the rental pricing software industry. The outcome of this case could have far-reaching implications for the tech sector and the broader economy, emphasizing the importance of enforcing antitrust laws to protect competition and consumer interests. As the legal battle unfolds, the Justice Department’s lawsuit against RealPage will likely continue to attract attention and scrutiny from policymakers, industry experts, and consumers alike.