A real estate company is accused by the Department of Justice of artificially increasing rent prices in the United States.
The charges allege that a Texas-based corporation is accused of using confidential, unavailable landlord data to fine-tune its rental price recommendation algorithm, a “massive scheme to undermine fair competition,” according to a Justice Department representative.
In a press release, Attorney General Merrick Garland said, “Tenants should not have to pay higher rents because of a company that is trying to collude with landlords and break the law.” The charges suggest that RealPage’s algorithm allows landlords to exchange classified and sensitive information about competitors and adjust rental prices accordingly.
According to the complaint, the software relies on non-public information from landlords, including tracking competitors’ prices or incentives, to help landlords maximize their revenue from tenants in a variety of ways.
An anonymous Justice Department official said, “Landlords and RealPage recognize that they have a lot of tools to thrive in a free market.” He also explained that RealPage’s software eliminates the need for landlords to compete fiercely for tenants because they can rely on the algorithm.
The complaint presents a new argument that the algorithm developed by the company violates antitrust rules, according to Justice Department officials.
The Justice Department’s lawsuit comes at a time of rising corporate ownership, with multiple apartment properties a focal point of the case.
As one official noted, “It’s not hard to imagine all this collusion happening at a time of…an increase in corporate landlords evicting tenants at a higher rate than individual landlords, who often don’t have the funds to use this type of software.”
The software, according to the Department of Justice, holds a monopoly in the rental management software market. This software is used to manage over 3 million rental properties across the