The U.S. Department of Justice, joined by eight states, has filed a lawsuit against RealPage, accusing the company of using algorithms to help landlords collude and drive up apartment rents, raising concerns over high housing costs.
Bollywood Fever: The U.S. Department of Justice, alongside eight states, has taken legal action against RealPage, a property management software company, accusing it of using algorithms to facilitate illegal collusion among landlords, ultimately driving up apartment rental prices.
The lawsuit, filed in North Carolina, alleges that RealPage, headquartered in Dallas, Texas, enabled landlords to collaborate by sharing pricing information through the company’s software, which then suggested rent prices.
According to the Justice Department, this practice discouraged landlords from lowering rents or offering incentives to attract tenants.
High housing costs remain a significant concern for U.S. consumers, especially as the November presidential election approaches.
According to real estate service firm Zillow, home prices have surged by about 50%, while rents have increased by approximately 35% over the last five years.
This case marks the first instance of the Justice Department targeting algorithmic collusion, a rising issue for antitrust regulators as technology companies increasingly offer pricing services based on extensive data analysis.
“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,” stated Attorney General Merrick Garland.
The Justice Department highlighted statements made by RealPage executives, which suggest that the company was aware of its role in reducing competition within the rental housing market.
One executive reportedly said, “There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,” according to the Justice Department.
Additionally, the lawsuit accuses RealPage of illegally monopolizing the market for property management software used in multi-family housing across the U.S.
The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington have joined the Justice Department in this legal challenge.
This lawsuit follows similar accusations from the attorney general of Washington D.C. and renters, who claim that RealPage’s practices have unlawfully inflated rents.
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