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The U.S. Department of Justice (DOJ) filed an antitrust lawsuit on Friday accusing RealPage, a provider of revenue management software, of enabling residential landlords to fix rental prices. The suit, filed in North Carolina federal court, alleges that RealPage’s software collects and shares data among landlords, helping them coordinate rent increases through algorithmic pricing recommendations.

Justice Department Sues RealPage : DOJ’s Allegations

The DOJ claims that RealPage facilitated unlawful information sharing among competing landlords, allowing them to make pricing decisions that would not occur in a competitive environment. The lawsuit accuses the software company of violating the Sherman Antitrust Act by allowing landlords to collaboratively adjust rent prices, leading to artificially high rates that harm renters.

Attorney General Merrick B. Garland likened the scheme to modern-day price-fixing, stating that, "Today, it looks like landlords using mathematical algorithms to align their rents." Garland emphasized that antitrust laws still apply to such behavior, despite the use of new technology.

Impact on Renters

The lawsuit claims that RealPage’s algorithms have driven up rents across the country, forcing tenants to pay more for housing. Jonathan Kanter, head of the DOJ’s Antitrust Division, said the company’s practices have hurt renters by limiting competition, leading to higher rent prices and placing financial strain on families. He criticized RealPage’s "a rising tide raises all ships" mantra, stating that while it benefits landlords, renters are left struggling to afford essential living expenses.

The DOJ has been joined by eight states, including North Carolina, California, and Washington, in pursuing the lawsuit. The government alleges that RealPage’s business model undermines the natural competitive forces of the housing market, inflating rents beyond what they would be in a fair environment.

Justice Department Sues RealPage : Broader Legal Landscape

RealPage has already been facing private class action lawsuits and state-level enforcement actions in places like Washington, D.C., and Arizona. These cases center around accusations that RealPage’s software allowed landlords to inflate rents by colluding on pricing. The DOJ's lawsuit adds significant federal weight to the mounting legal challenges against the company.

The allegations focus on RealPage's violation of Section 1 of the Sherman Antitrust Act, which prohibits price-fixing schemes, and Section 2, which addresses monopolistic practices. The DOJ claims RealPage monopolized the market for revenue management software used by multifamily housing owners, further reducing competition.

Next Steps

The lawsuit is part of the DOJ’s broader effort to combat rising housing costs and restore competition in the rental market. As the case moves forward, RealPage will have to respond to the claims, and the DOJ will continue its push to hold the company accountable for allegedly driving up rent prices across the country.