The Justice Department, along with eight states, is taking legal action against RealPage, the company behind a popular software used by landlords to set rental prices. The lawsuit alleges that RealPage’s algorithmic pricing software manipulates prices and harms competition in the apartment leasing market. According to the complaint, RealPage obtains confidential rental price information from rival landlords who use the software, and then uses this data to provide rent rate suggestions to its users.
One of the key accusations in the lawsuit is that RealPage holds a monopoly in the commercial revenue management software sector for multi-family dwellings, with an estimated market share of about 80 percent. This dominant position, combined with the sensitive data it collects from landlords, gives RealPage an unfair advantage in the market. The lawsuit claims that RealPage’s actions stifle competition and harm renters by eliminating concessions and discounts that landlords could offer independently to attract tenants.
The complaint further asserts that RealPage’s software goes beyond mere recommendations and actively influences landlords’ pricing decisions. Landlords can choose to automate rent adjustments based on RealPage’s algorithm, effectively outsourcing their pricing function to the company. By encouraging landlords to end concessions and discounts, RealPage undermines the competitive nature of the leasing market, depriving renters of the benefits of true competition and choice.
RealPage has been under scrutiny by the Department of Justice for some time, and this lawsuit represents a significant escalation in the government’s efforts to address anti-competitive practices in the tech industry. By challenging RealPage’s business practices in court, the DOJ aims to protect consumers, promote fair competition, and ensure that landlords have the freedom to make independent pricing decisions without undue influence from a single dominant player.
The lawsuit against RealPage reveals the growing concerns surrounding the influence of algorithmic pricing software on the rental market. By allegedly manipulating prices, eliminating concessions, and maintaining a monopoly position, RealPage may be harming both landlords and renters alike. The outcome of this legal battle could have far-reaching implications for the future of competition in the real estate tech sector.
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