The Justice Department, alongside the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, has filed a civil antitrust lawsuit against RealPage Inc. The suit alleges that RealPage engaged in an unlawful scheme to reduce competition among landlords in apartment pricing and monopolize the market for commercial revenue management software used by landlords to price apartments. This conduct is said to harm millions of American renters by depriving them of competitive leasing terms.
Filed in the U.S. District Court for the Middle District of North Carolina, the lawsuit claims that RealPage violated Sections 1 and 2 of the Sherman Act. According to the complaint, RealPage contracts with competing landlords who share nonpublic, competitively sensitive information about their rental rates and lease terms. This data is used to train and run RealPage’s algorithmic pricing software, which then generates recommendations for participating landlords based on this shared information.
Attorney General Merrick B. Garland stated: “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.” He added that using software as a sharing mechanism does not protect this scheme from Sherman Act liability.
Deputy Attorney General Lisa Monaco emphasized the department's commitment to holding serious wrongdoers accountable: “By feeding sensitive data into a sophisticated algorithm powered by artificial intelligence, RealPage has found a modern way to violate a century-old law through systematic coordination of rental housing prices.”
Acting Associate Attorney General Benjamin C. Mizer criticized RealPage’s actions: “RealPage’s egregious, anticompetitive conduct allows landlords to undermine fair pricing and limit housing options while stifling necessary competition.”
Assistant Attorney General Jonathan Kanter noted: “As Americans struggle to afford housing, RealPage is making it easier for landlords to coordinate to increase rents.”
The complaint includes internal documents and testimony indicating that RealPage's objective was maximizing rental pricing at renters' expense. For instance:
- RealPage referred to its products as “driving every possible opportunity to increase price” and avoiding "the race to the bottom in down markets."
- A RealPage executive highlighted that its products help landlords avoid competing on merits.
- Another executive explained how competitor data could lead to higher rent increases.
- A landlord described RealPage’s product as classic price fixing due to its use of proprietary data from other subscribers.
The lawsuit alleges that these practices harm local rental markets across the United States by encouraging loyalty through measures like "auto accept" functionality and compliance monitoring by pricing advisors. This approach tends to maximize price increases while minimizing decreases.
Additionally, it is alleged that RealPage maintains an approximately 80% market share over commercial revenue management software for multi-family dwellings in the U.S., reinforcing its market dominance through a feedback loop created by shared competitor data.
RealPage Inc., headquartered in Richardson, Texas, specializes in property management software.