Recently, US prosecutors unveiled wide-ranging antitrust charges against a property management software company known as RealPage. The allegations suggest that RealPage has been utilizing algorithms to facilitate collusion among landlords, ultimately leading to harm for renters across various markets in the United States. This has sparked a significant legal battle between the Department of Justice and RealPage, with both parties firmly standing their ground.
The Department of Justice, along with eight US states, filed a civil lawsuit against RealPage, claiming that the company has established a “monopoly” over commercial revenue management software. The primary allegation revolves around RealPage’s algorithmic software, which reportedly enables landlords to manipulate prices based on real-time inputs and projections of vacancies and other sensitive data from competing landlords. This behavior, according to the complaint, allows landlords to charge higher prices than they normally would, ultimately detrimental to consumers and renters.
This lawsuit marks a significant development as it is the first instance of US prosecutors honing in on anticompetitive behavior that is centered on computer algorithms. The US Attorney General, Merrick Garland, described RealPage’s conduct as “classic price fixing,” emphasizing the importance of competition among landlords as a safeguard for renters. The sentiment was echoed by Assistant Attorney General Jonathan Kanter, who emphasized the role of data science experts in identifying how technology can be used for questionable purposes in markets like rental housing.
RealPage, on the other hand, has vehemently denied the allegations, vowing to vigorously fight the lawsuit. The company has dismissed the charges as groundless and has attributed the rising rental inflation to broader issues such as housing supply shortages and high mortgage rates. RealPage also views the lawsuit as a distraction from the essential matters at hand and believes that the lawsuit lacks merit in making housing more affordable.
RealPage’s influence in the property management software industry is vast, serving companies that collectively manage three million housing units. The company’s stronghold in regions like the US Sunbelt and the South is particularly notable, with officials pointing out that in markets like Raleigh, North Carolina, RealPage commands a significant portion of the rental market share. This high level of penetration in the market raises concerns about monopolistic practices and their impact on competition and consumer welfare.
The antitrust charges against RealPage shed light on the intersection of technology, competition, and consumer protection in the real estate market. The outcome of this legal battle will not only determine the fate of RealPage but also set a precedent for how antitrust laws are enforced in the digital age. As the case unfolds, it will be crucial to assess the implications for renters, landlords, and the broader rental housing market in the United States.
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