DOJ sues software firm, alleging pricing algorithm enables landlords to raise rents
The Department of Justice (DOJ) sued the property management software company RealPage on Friday, alleging that its pricing algorithm enables landlords to share sensitive pricing information and raise rental prices.
The lawsuit, which was joined by the attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington, accuses RealPage of violating antitrust law by limiting competition among landlords.
“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,” Attorney General Merrick Garland said in a statement.
“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,” he added.
The DOJ alleges that RealPage contracts with competing landlords who share “nonpublic, competitively sensitive information” about rental rates, which is then used by its algorithmic pricing software to generate recommendations on pricing and other terms, according to a press release.
“By feeding sensitive data into a sophisticated algorithm powered by artificial intelligence, RealPage has found a modern way to violate a century-old law through systematic coordination of rental housing prices — undermining competition and fairness for consumers in the process,” Deputy Attorney General Lisa Monaco said in a statement.