The Justice Department, in collaboration with eight states, has filed a lawsuit against RealPage, the company behind a popular software used by landlords to set rental prices. The lawsuit alleges that RealPage’s rent recommendation algorithm is actually driving up prices and depriving renters of the benefits of competition in the market. According to the complaint, RealPage obtains nonpublic rental price information from competing landlords who use the software and uses this data to offer suggestions about rent rates.
The lawsuit further claims that the company goes beyond mere suggestions and actually dictates landlords’ pricing policies, aiming to eliminate concessions and discounts for renters. Landlords are given the option to automate their pricing decisions through an “auto accept” feature that adjusts rents based on RealPage’s algorithm. This, according to the complaint, takes away the independence of landlords to make competitive decisions in the marketplace.
Another concerning aspect highlighted in the lawsuit is RealPage’s monopoly in commercial revenue management software for multi-family dwellings. The company reportedly holds around 80 percent of the market share in this sector, giving it a significant advantage over its competitors. The DOJ alleges that RealPage’s agreements with landlords and access to sensitive data create an unfair competitive edge for the company, further solidifying its dominance in the market.
RealPage has been under scrutiny by the Department of Justice for some time now, and the recent lawsuit sheds light on the company’s alleged anti-competitive practices. The lawsuit emphasizes the importance of fair competition in the rental market and aims to hold RealPage accountable for its actions. As the case unfolds, it will be interesting to see how RealPage responds to the allegations and what impact the lawsuit may have on the company’s future operations.