Renting Trouble: DOJ Accuses RealPage of Orchestrating Nationwide Price Fixing

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You’re not alone if you’ve ever felt that apartment rental prices seem to rise in unison across your city. A recent civil lawsuit filed by the U.S. Department of Justice (DOJ) suggests that this might not be a coincidence but rather the result of a sophisticated algorithm designed to manipulate the rental market. The lawsuit targets RealPage, a Texas-based company, accusing it of using its revenue management software to orchestrate a nationwide price-fixing scheme.

RealPage and the Alleged Price-Fixing Scheme

RealPage, a significant player in commercial revenue management, offers landlords tools to set and adjust rental prices. Its flagship software, YieldStar, utilizes complex algorithms to analyze market data and recommend pricing. While this might seem like a standard business practice, the DOJ’s lawsuit claims that RealPage’s algorithms are not just optimizing prices but are instead central to manipulating them.

According to the DOJ, RealPage’s system allows landlords to input sensitive data, which the software then uses to generate pricing suggestions. This process allegedly promotes coordination among landlords, effectively stifling competition and leading to inflated prices. The lawsuit describes a scenario where, thanks to algorithmic coordination, rental prices are systematically raised across multiple properties, creating a rigged market environment.

A Broad Reach and Deep Impact

RealPage’s software is not a minor player—it holds a commanding 80% of the market for revenue management tools in the rental housing sector. This dominance means its influence extends to around three million apartment units across the U.S. The DOJ’s complaint, supported by eight state attorneys general, underscores the vast scope of RealPage’s impact. This software’s reach means that rent increases driven by these algorithms are not confined to a single city but ripple across the country, affecting renters everywhere.

The controversy surrounding RealPage gained significant attention following a 2022 ProPublica investigation. The report highlighted how YieldStar’s algorithms might facilitate collusion among landlords, resulting in coordinated rent hikes that appear suspiciously synchronized. This revelation painted a troubling picture of an industry where competition is undermined by sophisticated technology.

The DOJ’s Groundbreaking Legal Action

This lawsuit marks a pivotal moment in legal history. While there have been criminal cases against algorithm-driven price-fixing, such as those involving Amazon sellers, this is the first civil case where the algorithm itself is at the heart of the allegations. The DOJ’s action challenges not just the practices of a significant company but the broader implications of algorithmic price-fixing.

The lawsuit quotes RealPage executives allegedly acknowledging the anti-competitive aspects of their product. One executive is reported to have commented on the greater good of industry-wide success versus cutthroat competition. This statement, if accurate, suggests a troubling awareness of the software’s impact on market dynamics.

RealPage’s Defense and the Road Ahead

In response to the lawsuit, RealPage has firmly denied any wrongdoing. The company has published a digital pamphlet and an extensive FAQ on a dedicated public policy website, asserting that its revenue management tools are designed to benefit both landlords and tenants. RealPage’s defense hinges on the argument that its software promotes efficient pricing rather than collusion.

As the legal proceedings unfold, the case could have far-reaching implications for the rental housing industry. It raises critical questions about how technology influences markets and what regulations might be needed to ensure fair competition. For renters and industry observers, the outcome of this lawsuit could redefine how rental prices are set and whether technological tools will continue to be used in ways that might undermine market fairness.

In the meantime, the broader conversation about algorithmic transparency and accountability in business practices continues. The RealPage lawsuit is a reminder of the growing intersection between technology and regulation and the ongoing need for vigilance to protect competitive markets and consumer interests.