WASHINGTON (TN) — A real estate software company is being sued by the Justice Department and several states for allegedly allowing landlords to raise rents.
Attorney General Merrick B. Garland and other federal prosecutors announced Friday that RealPage Inc.’s software enabled landlords to raise rents across the United States.
The government filed the lawsuit against the Richardson, Texas-based company in the U.S. District Court for the Middle District of North Carolina. The lawsuit alleges that the company violated Sections 1 and 2 of the Sherman Act. Prosecutors said millions of tenants were harmed.
The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington joined U.S. Attorney General Merrick B. Garland in the civil antitrust lawsuit.
The lawsuit alleges that RealPage violated antitrust laws with its algorithm that landlords use to obtain recommended rental prices for apartments.
This software then generates recommendations based on competition-relevant information from the participating landlords and their competitors, including recommendations on apartment rental prices and other conditions.
The lawsuit further alleges that in a free market, these landlords would otherwise compete independently for tenants based on prices, discounts, concessions, lease terms and other aspects of apartment leasing.
The government accused RealPage of using this system and its extensive database to maintain a monopoly position in the commercial revenue management software market.
Prosecutors want to “end RealPage’s illegal conduct and restore competition to the benefit of renters in every state across the country.”
In a statement, Attorney General Merrick Garland said: “Americans should not have to pay more rent just because a corporation found a new way to scheme with landlords and break the law.”
In a statement posted on its website in June, RealPage called the allegations against the company “false and misleading” and argued that the company’s software actually “contributes to a healthier and more efficient rental housing ecosystem.” RealPage said landlords can set their own rental prices and reject the software’s recommendations.
This is the latest example of the Biden administration’s aggressive antitrust policies.
The Justice Department sued Apple in March and announced a full-blown lawsuit against Ticketmaster and its owner Live Nation Entertainment in May. Antitrust regulators have also launched investigations into the roles Microsoft, Nvidia and OpenAI played in the artificial intelligence boom.
Editor’s note: The Associated Press contributed to this report.
