Washington joins feds in suit against maker of apartment rental pricing software

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Washington is one of eight states to join the U.S. Department of Justice in an antitrust lawsuit filed Friday against RealPage Inc., arguing the company’s software has enabled landlords to coordinate in inflating apartment rent prices.

The suit says the company contracts with competing landlords who share “granular rental data,” including information on prices in executed leases, renewals, and inquiries and applications from prospective renters. RealPage feeds this information into its algorithmic pricing software, which produces recommendations for rent prices and other lease terms.

It adds up to a price-fixing scheme, the lawsuit argues.

“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,” says the complaint, filed in U.S. District Court in North Carolina.

“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,” said U.S. Attorney General Merrick Garland.

The lawsuit also argues that RealPage has monopolized the commercial revenue management software that landlords use to price apartments, controlling about 80% of the market.

The Texas-based company rejected the allegations and said it would defend itself.

“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” Jennifer Bowcock, a spokeswoman for the company, said in a statement.

“RealPage’s revenue management software is purposely built to be legally compliant,” she added.

An estimated 800,000 leases in Washington have been priced using RealPage revenue management software since 2017, according to the state attorney general’s office. The state agency began investigating RealPage last year following reporting by ProPublica about how the company’s software could contribute to rising rents.

“RealPage colluded to fix prices and keep rents rising in order to boost profits,” Attorney General Bob Ferguson said in a statement.

The Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Tennessee also signed onto the lawsuit.

RealPage offers three revenue management systems to landlords – YieldStar, AI Revenue Management, and Lease Rent Options. The lawsuit says that the company has access to confidential information on more than 16 million rental units across the country.

“Training a machine to break the law is still breaking the law,” said Deputy U.S. Attorney General Lisa Monaco. “Today’s action makes clear that we will use all our legal tools to ensure accountability for technology-fueled anticompetitive conduct.”