DOJ charges RealPage program helps raise rents in antitrust suit

DOJ charges RealPage program helps raise rents in antitrust suit is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• The U.S. Department of Justice on Friday filed an antitrust lawsuit against real estate software company RealPage, alleging an illegal scheme that allows landlords to coordinate higher rent prices.
• The lawsuit, filed with the attorneys general of North Carolina and California, among other states, alleges that the company violated antitrust laws through its algorithm, which landlords use to get recommended rent prices for millions of flats across the country.

OUR TAKE
Ministry of Justice officials claim that RealPage is another reason for high rents, in addition to a severe shortage of housing supply, because the algorithm allows landlords to adjust prices and avoid competition that would otherwise depress rents. The control of prices should not rely solely on the formula, but should also be controlled manually to prevent monopolistic behaviour.
— Iydia Ding, BTW reporter

What happened

The U.S. Department of Justice on Friday filed an antitrust lawsuit against real estate software company RealPage, alleging an illegal scheme that allows landlords to coordinate higher rent prices. The lawsuit, filed with the attorneys general of states including North Carolina and California, alleges that the company violated antitrust laws through its algorithm, which is used by landlords to obtain recommended rent prices for millions of flats across the country.

“We are disappointed that after years of education and cooperation on RealPage’s antitrust matters, the U.S. Department of Justice chose this moment to file a lawsuit in an attempt to scapegoat pro-competitive technology that has been used responsibly for years.” the company said.

In an interview, Dom Beveridge, a veteran expert in the field of income management unrelated to the lawsuit, mounted a detailed, spirited defence of the income management software and said prosecutors fundamentally misunderstand how such products work.

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Why it’s important

The case is the latest example of the Biden administration’s aggressive antitrust enforcement. In recent years, the DOJ has engaged in a series of controls over the monopolistic practices of technology companies. The DOJ sued Apple in March and announced a full-blown lawsuit against Ticketmaster and its owner, Live Nation Entertainment, in May. Antitrust enforcers are also investigating Microsoft, Nvidia and OpenAI for their role in the artificial intelligence boom.

Rents across the U.S. spiked dramatically in 2021 and 2022, and although growth has slowed since then, rents remain high for many tenants, in part because of a severe shortage of housing supply. DOJ officials claim that RealPage is another cause of high rents, in addition to a severe shortage of housing supply, because the algorithm allows landlords to adjust prices and avoid competition that would otherwise depress rents. Monopolistic behaviour is detrimental to the overall development of the technology industry and the stability of competition in the marketplace. Prices should not be controlled solely by formulae, but also manually to prevent monopolistic behaviour.