Justice Department antitrust suit against RealPage alleges collusion with landlords

The Justice Department and several state attorneys general filed an antitrust suit Friday against RealPage, alleging the real estate software company engaged in a complex collusion scheme with landlords that resulted in higher prices for renters across the country.

The lawsuit is the latest salvo in the Biden administration's increasingly aggressive efforts to rein in powerful companies who they accuse of using their dominance in the markets to harm consumers.

The Justice Department's suit, a result of what officials described as a years-long “painstaking” investigation, alleges the company unlawfully conspired with landlords who agreed to share with the company non-public information related to rental rates and lease terms that RealPage then entered into its algorithmic pricing software.

As a result, the lawsuit alleges, the software would generate pricing recommendations for properties based on the non-public information that in the usual course of business would not be part of normally competitive efforts between landlords to attract renters.

While the company has faced civil lawsuits before at the state level over allegations of collusion, officials said the suit appears to be the first federal one of its kind involving such an advanced algorithmic collusion scheme.

“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,” Attorney General Merrick Garland said in a statement announcing the lawsuit. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents."

The civil complaint against the company quotes extensively from internal documents and testimony from RealPage executives, including one instance where the company allegedly acknowledged how its software benefited landlords' efforts to maximize prices -- describing its software as "a rising tide raises all ships."

While it's not immediately clear what the department will ultimately demand of the company if a judge finds its actions violated antitrust laws, the Justice Department said in a release it will seek an order that RealPage cease in its alleged collusion with landlords "and restore competition for the benefit of renters in states across the country."

RealPage did not immediately respond to a request for comment on the lawsuit from ABC News.