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USA accuses software companies of pushing for rent increases


USA accuses software companies of pushing for rent increases

The United States has sued a leading software company that collects and sells data on rental relationships, accusing the company of undermining competition among landlords and exacerbating the country’s housing crisis.

The U.S. Department of Justice alleges that RealPage’s software algorithm means that competing landlords share otherwise confidential information, allegedly allowing them to illegally coordinate and increase rents.

“Everyone knows the rent is way too damn high, and we argue that’s one of the reasons why,” Attorney General Merrick Garland said at a press conference announcing the lawsuit.

RealPage did not immediately comment, but has previously made similar allegations false and misleading.

The Texas-based company, owned by private equity firm Thoma Bravo, has been in the spotlight in recent years after an investigation by ProPublica drew attention to his practices.

The company was already the target of lawsuits from tenants and prosecutors in Arizona and the District of Columbia earlier this year.

Since housing affordability is a sensitive issue in the United States, criticism of algorithms for setting rents has also become a staple of Vice President Kamala Harris’ speeches during her presidential campaign.

In the complaint, the Justice Department and eight states allege that RealPage had access to information on millions of homes across the country.

“RealPage enables landlords to manipulate, distort and undermine market forces,” the Justice Department alleged in the complaint.

The attack targeted a RealPage offering that provides rental recommendations to its property-owning customers, giving the impression that many of them “automatically accept” RealPage’s suggestions.

The company claimed it dominated the commercial revenue management software market, citing the company’s own estimates that it controlled around 80 percent of the market.

In June, RealPage said it served a much smaller portion of the rental market than it claimed and that rates were set by landlords, not RealPage.

This is a first for the federal government, as it has to deal with the increasing use of pricing algorithms throughout the economy.

Officials said they observed such practices in the meat industry and elsewhere.

“Today, bad actors cannot hide behind software algorithms and artificial intelligence to violate the law,” said Assistant Attorney General Jonathan Kanter, who heads the department’s anti-monopoly unit.

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