The U.S. Department of Justice (DOJ) has taken legal action against RealPage after a lengthy investigation, which included an FBI raid on a major corporate landlord. The DOJ claims that RealPage, based in Richardson, Texas, engaged in anti-competitive practices that harmed millions of tenants nationwide by artificially inflating rents and limiting competition among landlords.
Attorney General Merrick B. Garland stated in a press release, “We allege that RealPage’s pricing algorithm facilitated the sharing of confidential information among landlords, allowing them to align their rents.”
The DOJ filed a 115-page complaint in the U.S. District Court for the Middle District of North Carolina, outlining how RealPage entered into contracts with competing landlords to gather sensitive data on rent prices, lease terms, amenities, and occupancy rates.
RealPage allegedly used this information in an AI-driven algorithm that provided landlords with recommendations on pricing rentals and lease terms. The company’s tactics included sending pricing advisors to meet with landlords and implementing an “auto accept” feature to ensure compliance with its recommendations.
In 2020, RealPage boasted that its software collected data on 16 million rental units out of 22 million investment-grade apartment units in the U.S., indicating the widespread impact of its practices.
U.S. Attorney General Merrick Garland (C), U.S. Deputy Attorney General Lisa Monaco (L) and U.S. Acting Associate Attorney General Benjamin Mizer (R). Photo Credit: Anna Moneymaker/Getty Images
Assistant Attorney General Jonathan Kanter of the DOJ’s Antitrust Division emphasized that competition, not RealPage, should dictate rental prices to ensure fair market practices.
RealPage released a statement dismissing the DOJ’s claims as baseless and stated that the lawsuit would not address housing affordability issues. The company defended its actions as pro-competitive technology.
In contrast, the American Economic Liberties Project (AELP) criticized RealPage’s approach, citing the company’s marketing materials that indicated a focus on maximizing rent increases. AELP senior legal counsel Lee Hepner raised concerns about RealPage’s impact on working people struggling to afford housing.
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