The U.S. Department of Justice and the attorneys general of eight states have filed an antitrust lawsuit against RealPage, accusing the company of operating an illegal scheme to drive up rental prices across the country.

According to Inman, the lawsuit, filed in the U.S. District Court for the Middle District of North Carolina, alleges that RealPage’s pricing algorithm allows landlords to share confidential information and adjust their rents, violating antitrust laws.

Attorney General Merrick Garland said the Justice Department will vigorously enforce antitrust laws to protect the American people.

“Americans should not have to pay more rent just because a company found a new way to work with landlords and break the law,” Garland said.

Assistant Attorney General Lisa Monaco said that by feeding sensitive data into a sophisticated artificial intelligence-based algorithm, RealPage found a modern way to violate a centuries-old law.

“Training a machine to break the law is still breaking the law,” Ms Monaco said.

The Justice Department alleges that RealPage’s software acts as a sharing mechanism for landlords, allowing them to coordinate pricing rather than compete with each other.

According to the New York Times, this lawsuit is the first major antitrust dispute involving an algorithm.

RealPage, owned by private equity firm Thoma Bravo, has denied any wrongdoing.

Company spokeswoman Jennifer Bowcock said the company was disappointed with the Justice Department’s decision.

She said the lawsuit “seeks to scapegoat pro-competitive technologies that have been used responsibly for years.”

The lawsuit comes at a time when the housing market is experiencing high vacancy rates due to increased construction activity.

The Justice Department argues that in a free market, landlords should compete on price and quality to attract tenants.

The complaint uses RealPage’s marketing language to describe how the company offered its services to large landlords to avoid competition.

The U.S. Department of Justice is seeking an injunction to prevent RealPage from implementing its information-sharing framework and end the company’s alleged monopoly.

RealPage sold its software to landlords as a tool to maximize rental prices, even in markets where vacancy rates would normally drive down prices.

The Justice Department said the practice thwarts natural market forces and harms tenants.

The lawsuit poses a significant challenge to the use of algorithms in pricing strategies in the real estate industry.

It also raises questions about the boundary between technological innovation and anti-competitive practices in the digital age.