On August 23, the U.S. Department of Justice, along with the Attorneys General of several states*, file an antitrust lawsuit against property management software maker RealPage. The suit alleges that the revenue management software sold by RealPage constitutes a “scheme to decrease competition among landlords in apartment pricing.” RealPage is also alleged to have attempted to monopolize the market for revenue management software.
U.S. Attorney General Merrick Garland said, “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. We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents. Using software as the sharing mechanism does not immunize this scheme from Sherman Act liability, and the Justice Department will continue to aggressively enforce the antitrust laws and protect the American people from those who violate them.”
In June, RealPage had issued a preemptive defense of its revenue management product, highlighting the fact that it only supplies recommendations that the users can decline. RealPage also stated that users of its revenue management product “consistently achieve vacancy rates below the national average.” They would not be able to do this if they were charging rents that were higher than those prevailing in the local market.
A key point in the DOJ’s suit is the claim that RealPage’s product uses data from competing landlords to set prices. RealPage says that they only use such data when it provides accuracy that “aids pro-competitive uses.” The DOJ also alleges that RealPage’s “auto accept” feature and the fact that they encourage landlords to reduce concessions are problematic.
The DOJ had previously weighed in on the side of the private plaintiffs suing RealPage over its revenue management product.
*The states participating in the lawsuit are California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington.
