Washington is one of eight states that joined the U.S. Department of Justice’s antitrust case against RealPage Inc. filed Friday, arguing that the company’s software allowed landlords to coordinate on rent increases.
The complaint says the company has entered into agreements with competing landlords that share “granular rental data,” including information about rates in signed leases, renewals, and inquiries and applications from prospective tenants. RealPage feeds this information into its algorithmic pricing software, which makes recommendations for rental rates and other lease terms.
The lawsuit states that this is a price-fixing agreement.
“RealPage replaces competition with coordination. It replaces rivalry with unity. It undermines competition and the competitive process. It does so openly and directly – and American renters are paying the price,” said the lawsuit, filed in U.S. District Court in North Carolina.
“Americans should not have to pay more rent just because a company found a new way to negotiate with landlords and break the law,” said U.S. Attorney General Merrick Garland.
The lawsuit also argues that RealPage has a monopoly on the commercial revenue management software that landlords use to price apartments, controlling about 80 percent of the market.
The Texas-based company denied the allegations and announced it would defend itself.
“We are disappointed that after many years of research and cooperation on the antitrust issues surrounding RealPage, the Department of Justice is now bringing a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” Jennifer Bowcock, a spokeswoman for the company, said in a statement.
“RealPage’s revenue management software is deliberately designed to comply with regulatory requirements,” she added.
An estimated 800,000 leases in Washington have been billed using RealPage’s revenue management software since 2017, according to the state Attorney General’s Office. The state agency began investigating RealPage last year after Reporting by ProPublica about how the company’s software could contribute to rising rents.
“RealPage colluded to fix prices and continue to increase rents to increase profits,” Attorney General Bob Ferguson said in a statement.
The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Tennessee have also joined the lawsuit.
RealPage offers three revenue management systems to landlords – YieldStar, AI Revenue Management and Lease Rent Options. The lawsuit says the company has access to confidential information on more than 16 million rental units across the country.
“Training a machine to break the law is still breaking the law,” said U.S. Assistant Attorney General Lisa Monaco. “Today’s action makes clear that we will use all of our legal tools to ensure accountability for technology-enabled anticompetitive behavior.”
