RealPage Settles DOJ Antitrust Case Over Algorithmic Rent-Setting
A proposed settlement between the Department of Justice and RealPage aims to restore competition in rental markets by curbing the use of data-driven algorithms accused of artificially inflating housing costs.
The DOJ and RealPage, a Texas-based software company, announced the agreement on Monday, resolving allegations that RealPage’s software enabled landlords to collude – not through direct communication, but through shared data and automated pricing recommendations – potentially violating antitrust laws. The settlement, pending judicial approval, marks a significant step in the Biden administration’s efforts to address rising housing costs and the growing influence of algorithms in everyday life.
The Core of the Allegation: Algorithmic Collusion
At the heart of the case is revenue management software sold by RealPage. Prosecutors argued this software allowed landlords to share nonpublic, “competitively sensitive” data – information about vacancy rates, lease terms, and tenant demand – to inform their pricing strategies. This data sharing, the DOJ contends, reduced competition and led to increased rents in some of the nation’s largest rental markets.
Under the terms of the proposed settlement, RealPage will cease offering software that relies on this type of shared data to recommend rental prices. The company will also halt its practice of conducting market surveys to gather such information and refrain from discussing pricing strategies based on nonpublic data during meetings with property managers. Furthermore, RealPage must remove or redesign software features that restrict rent decreases or encourage price alignment among competitors.
A court-appointed monitor will oversee RealPage’s compliance with the agreement, and the company has pledged to cooperate with ongoing prosecutions of property managers who utilized the software.
A ProPublica Investigation Sparked Scrutiny
The DOJ’s investigation was spurred, in part, by a 2022 investigation by ProPublica, which revealed how RealPage’s tools were being used to influence rental pricing in a manner that some legal experts likened to cartel-like behavior. Following the report, dozens of tenants filed lawsuits against RealPage.
In 2024, the DOJ filed an antitrust complaint against RealPage and, in January, initiated legal action against six of the nation’s largest landlords, including Greystar, alleging they improperly collaborated to raise rents using the algorithmic software. Several of these landlords have already reached settlements with prosecutors.
What Key Players Are Saying
The Justice Department emphasized the importance of restoring competitive forces in the rental market. “The proposed settlement would help restore free market competition in rental markets for millions of American renters,” the department stated. Assistant Attorney General Abigail Slater added, “Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement.”
RealPage, while not admitting wrongdoing, framed the settlement as a positive step toward clarity. According to a company release, the agreement “provides greater certainty for housing providers and technology innovators that revenue management software can be operated confidently and in compliance with the views of federal antitrust enforcers.” Dirk Wakeham, RealPage’s president and CEO, expressed optimism, stating the company is “pleased to have reached this agreement…which brings the clarity and stability we have long sought.”
A Bipartisan Effort and Broader Implications
The pursuit of this case has spanned multiple administrations, demonstrating a consistent concern over potential antitrust violations in the housing market. The Trump administration’s DOJ continued the litigation even as it shifted priorities in other areas of enforcement.
The case also highlights a growing trend of regulatory scrutiny surrounding the use of algorithms in various sectors. As federal prosecutors noted in a filing, “Algorithms are the new frontier” of collusion, moving beyond “a formal handshake in a clandestine meeting.”
This sentiment is echoed by lawmakers, with senators holding hearings and introducing legislation to ban the use of rent algorithms. Several cities, including San Francisco, Philadelphia, and Minneapolis, have already taken steps to prohibit landlords from utilizing similar tools to set rental prices.
The proposed agreement builds on a similar settlement reached in August with Greystar, the nation’s largest landlord, regarding its use of RealPage’s software. Greystar, like RealPage, did not admit wrongdoing but agreed to the settlement “to make clear the government’s interpretation of the law and to ensure we continue to do things the right way.”
RealPage maintains that its data-driven approach has actually led to “lower rents, less vacancies, and more procompetitive effects,” but declined to offer further comment on the settlement. The company assures clients that the agreement will not disrupt operations, stating that the required software modifications are “already made or planned” and that all its solutions remain “fully available, compliant, and configurable.”
The outcome of this case will likely set a precedent for future antitrust enforcement in the age of big data and algorithmic decision-making, signaling a willingness by authorities to address the complex challenges posed by these emerging technologies.
