Aug. 23, 2024 (DENVER) — Attorney General Phil Weiser today joined the Justice Department and a bipartisan coalition of states in filing a lawsuit against RealPage, Inc., a Texas-based revenue management software company. The lawsuit alleges that RealPage engaged in illegal agreements with landlords to implement a price-fixing scheme, resulting in increased rent payments for Coloradans.
“Half of renters in Colorado spend more than 30% of their income on housing costs. Renters should benefit from healthy competition between landlords to find an apartment that fits their budget and needs. But RealPage’s software and market dominance have enabled collusion between landlords to fix rents, set the number of apartments available in the market, and harm renters by forcing them to pay rents above competitive levels. This anticompetitive conduct is driving rent increases. That’s why we filed this lawsuit to hold RealPage accountable and to fight for renters,” said Weiser.
The lawsuit claims that RealPage facilitates collusion among landlords by using software that shares competitively sensitive data such as rents from executed leases, lease terms, and projected future vacancies. This data is then processed by an algorithm to provide daily pricing recommendations back to landlords.
RealPage reportedly makes it easy for landlords to accept these price recommendations while making it difficult to decline them. Additionally, the software often persuades landlords to end concessions like one-month free rent or rent discounts used to attract tenants. It also tracks the supply of available apartments, allowing landlords in high-demand markets to withhold properties from the market and increase rents.
A significant number of landlords use RealPage's software and share information with the company to eliminate uncertainty about competitors' actions and maximize rents at renters' expense. Consequently, RealPage controls about 80% of the market for commercial revenue management software for landlords by accumulating competitively sensitive data.
The lawsuit has been filed in U.S. District Court for the Middle District of North Carolina. It seeks an end to anticompetitive agreements between RealPage and its landlord customers regarding sharing confidential information and engaging in price alignment schemes. It also aims to dismantle RealPage’s alleged monopoly built on competitors’ data.
“I have repeatedly heard from Coloradans that high rents and the cost of housing is a top concern. Landlords need to operate fairly, which means not using abusive practices like deceptive or non-disclosed ‘junk fees’ and not using RealPage’s software to collude with rivals,” said Weiser. “We will continue to stand up for consumers and hold accountable those who take advantage of them.”
Attorneys general from California, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington are also participating in the lawsuit.