U.S. Justice Department Sues RealPage, Alleging It Enabled Rental Price Fixing

The Justice Department filed an antitrust complaint Friday against RealPage, a property management software provider, accusing it of enabling collusion among landlords to inflate rents for millions of Americans.

The complaint alleges that the Richardson, Texas-based company and its competitors engaged in a price-fixing scheme by sharing sensitive, nonpublic information that RealPage’s algorithmic pricing software used to generate price recommendations. The company replaced competition with rent coordination to the detriment of tenants across the United States, monopolizing the market through its revenue management software that was used by landlords to maximize rental costs, the complaint says.

The Justice Department is joined by the attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington. The complaint alleges that RealPage violated Sections 1 and 2 of the Sherman Act, an antitrust law.

“Americans should not have to pay more rent because a company found a new way to collude with landlords to break the law,” Attorney General Merrick B. Garland said in a statement Friday. “We assert that RealPage’s pricing algorithm allows landlords to share confidential and competitively sensitive information and align their rents. Using software as a sharing mechanism does not immunize this system from Sherman Act liability, and the Justice Department will continue to aggressively enforce antitrust laws and protect the American people from those who violate them.”

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Assistant Attorney General Lisa Monaco said RealPage violated a centuries-old law in a modern way, using an AI-powered algorithm to coordinate rental prices, “undermining competition and fairness for consumers.”

“Training a machine to break the law is breaking the law. Today’s action makes clear that we will use every legal tool at our disposal to ensure accountability for anticompetitive behavior fueled by technology,” she said in a statement.

RealPage says the allegations against the company are false and insists that RealPage customers decide their own rental prices and can override the algorithm's recommendations. The company added that it uses data responsibly.

“RealPage's revenue management software is specifically designed to comply with the law, and we have a history of working constructively with the DOJ to demonstrate that,” a company spokesperson said in a statement to CBS News.

The lawsuit comes as Americans struggle to afford basic necessities from housing to groceries, with high housing costs contributing to persistent inflation.

“As Americans struggle to afford housing, RealPage is facilitating coordination among landlords to raise rents,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today, we filed an antitrust lawsuit against RealPage to make housing more affordable for millions of people across the country. Competition, not RealPage, should determine the price Americans pay to rent their homes.”

RealPage acknowledged that its product was designed to maximize profits for homeowners, the complaint said, describing it as “promoting every possible opportunity to raise prices.”

One landlord praised RealPage's software, saying he liked it because the algorithm “uses proprietary data from other subscribers to suggest rents and terms. It's classic price-rigging…”

— Robert Legare of CBS News contributed reporting

More information on CBS News

Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, the workplace, health care, consumer spending and personal finance. She regularly appears on CBS News 24/7 to discuss her reporting.

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