DOJ Sues Landlord Software Company RealPage for Inflating Americans’ Rents

The U.S. Department of Justice and 8 authorities attorneys wide person filed an antitrust suit against the existent property bundle institution RealPage accusing it of colluding with landlords to alteration contention and artificially inflate rental prices.

The complaint alleges that the Texas-based institution feeds nonpublic accusation astir rent rates and lease presumption betwixt competing landlords into its algorithms, which past urge complaint increases to landlords based connected their competitors’ information. The result, the DOJ says, is that landlords don’t vie against each different to pull tenants and rents spell up crossed full markets.

“By feeding delicate information into a blase algorithm powered by artificial intelligence, RealPage has recovered a modern mode to interruption a century-old instrumentality done systematic coordination of rental lodging prices—undermining contention and fairness for consumers successful the process,” Deputy Attorney General Lisa Monaco said successful a statement. “Training a instrumentality to interruption the instrumentality is inactive breaking the law.”

According to the suit, RealPage executives and its landlord customers openly discussed terms fixing with the company’s products. “I ever liked this merchandise [AIRM] due to the fact that your algorithm uses proprietary information from different subscribers to suggest rents and term,” 1 landlord wrote to the company, according to the DOJ’s complaint. “That’s classical terms fixing….” 

Another landlord that utilized RealPage’s YieldStar algorithm allegedly told the institution that wrong 11 months of adopting the instrumentality they had accrued rents by much than 25 percent and had brought competitors prices up arsenic a result. A RealPage enforcement allegedly responded that it was a “great lawsuit study,” according to the complaint.

The company’s power connected nationalist rental prices appears to beryllium massive. Between January 2017 and June 2023, much than 85 percent of the last level program prices acceptable by landlords nationally were wrong 5 percent of the prices RealPage’s algorithms recommended, according to the lawsuit. The company’s bundle was allegedly designed to marque terms fixing astir automatic, with default features enabled that automatically judge recommended terms increases if they autumn wrong definite ranges. “By enabling auto-accept, a landlord functionally delegates pricing authorization to Real Page,” according to the lawsuit.

In effect to the lawsuit, a RealPage spokesperson told The New York Times that the company’s bundle was “purposely built to beryllium legally compliant.”

The DOJ’s lawsuit, which was joined by the attorneys wide of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, was filed successful a North Carolina national court.