DOJ Sues RealPage: Software Allegedly Fuels Rent Price-Fixing

Case Overview: The U.S. Department of Justice and several states have filed an antitrust lawsuit against RealPage, alleging its software facilitates collusion among landlords, leading to inflated rental prices.

Consumers Affected: Renters across the United States.

Court: U.S. District Court for the Middle District of North Carolina

The U.S. Department of Justice, joined by the states of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Tennessee, has filed an antitrust lawsuit against RealPage Inc., a leading property management software company. The suit alleges that RealPage's software effectively facilitates collusion among landlords, driving up rents and harming millions of renters nationwide.

RealPage's Software Accused of Facilitating Price Coordination Among Landlords

Central to the lawsuit is RealPage's revenue management software, which uses competitively sensitive information shared by landlords to generate pricing recommendations. The DOJ and states argue that this software creates near real-time price recommendations that distort the competitive process and ultimately hurting renters.

"RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price,” the lawsuit argues.

Lawsuit Alleges RealPage Collects And Exploits Competitively Sensitive Information

The lawsuit details how RealPage collects vast amounts of non-public information from landlords, including rental prices, lease terms, and future occupancy data. 

According to the complaint, “landlords, who would otherwise be competing with each other, submit on a daily basis their competitively sensitive information to RealPage.” This data is then fed into RealPage's algorithm, which produces pricing recommendations for landlords.

The DOJ and states says that these recommendations are unlawful, as a free market "requires that landlords compete on the merits, not coordinate pricing." The lawsuit emphasizes that "Landlords should win renters by offering whatever combination of price and quality they think is most attractive."

DOJ and States Say RealPage's Practices Inflate Rental Prices, Harm Consumers

The lawsuit highlights the substantial impact of housing costs on Americans, who on average allocate more than one-third of their monthly income to housing. The ability for renters to find affordable housing is essential, and the DOJ and states argue that RealPage's software undermines competition and artificially inflates rental prices.

The lawsuit also alleges that RealPage's practices have allowed it to solidify its dominant position in the market for commercial revenue management software. By its own account, RealPage controls at least 80% of this market. The DOJ and states contend that this dominance is unfairly maintained through RealPage's access to vast amounts of competitively sensitive information.

Government Seeks To End RealPage's Alleged Monopoly

"At bottom, RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices and honest businesses that would otherwise compete,” the lawsuit concludes.

In April, RealPage settled a class action lawsuit for $1.8 million over allegations that it charged illegal administrative fees on monthly statements, effectively acting as an unlicensed collection agency. The plaintiffs claimed these administrative fees, included in statements for utilities and other charges, violated Maryland law.

In the RealPage antitrust lawsuit, the United States and the participating states are seeking to end RealPage's alleged information-sharing scheme and its monopoly in commercial revenue management software. Their goal is to restore the free market for renters and honest businesses.

Case Details

• Lawsuit: United States of America, et al. v. RealPage, Inc.
• Case Number: 1:24-cv-00710
• Court: U.S. District Court for the Middle District of North Carolina

Have you experienced rent increases that you suspect might be linked to the use of RealPage's software? Share your thoughts and experiences in the comments below.