The attorneys general of Oregon and California have joined other states, the District of Columbia and the federal government in an antitrust lawsuit against a company that sells property management software that provides rental price recommendations to landlords.
The lawsuit against Texas-based RealPage accuses the company of collecting confidential rental data from more than 16 million apartments across the country to develop software that allows landlords to coordinate prices instead of competing with each other. It says RealPage has a monopoly on rental management software, controlling at least 80% of that market.
“Its dominant position is protected by significant data advantages derived from its vast store of unlawfully acquired competitive information from rival landlords,” the lawsuit says. “RealPage replaces competition with coordination. It replaces rivalry with unity. It undermines competition and the competitive process. It does so openly and directly – and America’s renters are paying the price.”
The lawsuit, filed Friday in U.S. District Court in North Carolina, comes at a time when rents are soaring in Oregon, particularly in the Portland area. Under normal market conditions, renters would benefit from competition among landlords, who would limit rent increases during boom times and lower rents during recessions to make housing more affordable, the lawsuit says. But it says RealPage’s software stifles competition, which Oregon Attorney General Ellen Rosenblum says violates the law.
“RealPage’s use of its AI pricing algorithm effectively acts as a hub for property managers and landlords to share confidential, competitively sensitive information and engage in a price-matching scheme to avoid competition,” Rosenblum said in a statement. “It undermines a fair rental market and is a violation of Oregon and federal antitrust laws (the Sherman Act).”
Jennifer Bowcock, a spokeswoman for RealPage, said in a statement that the company would “vigorously” defend itself against the allegations. She said the revenue management software was designed to be “compliant with the law” and that the company had worked “constructively” with the Justice Department for years. In 2017, the agency reviewed the software and found nothing objectionable.
“We believe the Justice Department’s demands are unfounded and will do nothing to make housing more affordable,” Bowcock said.
The lawsuit names areas in 24 states — Arizona, Alabama, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Kansas, Ohio, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Hampshire, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia and Washington — where at least 30% of property managers use RealPage’s software. In Oregon, that’s 54,000 units in the Aloha-Beaverton area and downtown Portland, where a one-bedroom, one-bath unit can cost more than $2,200 a month.
“Americans should not have to pay more rent just because a company found a new way to work with landlords and break the law,” U.S. Attorney General Merrick Garland said in a statement.
Rosenblum added that the housing situation in Oregon is a major problem, as rents there have risen sharply in recent years.
“At a time when housing affordability is a paramount concern for Oregonians – and for countless Americans outside our state’s borders – the issues of fairness and competition couldn’t be more important,” she said.
In addition to Oregon, the attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Tennessee and Washington joined the lawsuit.
The U.S. Department of Justice – along with Oregon and other states – has also filed antitrust lawsuits against Amazon and Meta, the owner of Facebook. In December, Google agreed to pay $700 million to settle an antitrust lawsuit related to its Play Store, and in March the U.S. Department of Justice, Oregon and other states sued Apple, also alleging that the company engaged in monopolistic behavior to limit competition.
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