of Department of Justice The (Department of Justice) continues to pursue suspected antitrust violations in the real estate industry.
The Department of Justice filed a civil lawsuit Real Page The company alleged on Friday that its YieldStar and AI Revenue Management (AIRM) software allows apartment complex landlords to artificially inflate rents by sharing personal information, which is then fed into the platform’s algorithms that make rental price recommendations.
“The software provides landlords with daily pricing proposals, eliminating the need to guess what competing landlords are doing,” Acting Deputy Attorney General Benjamin Mizer said in a statement. “As a result, landlords are able to align rents and tenants are limited in their ability to successfully negotiate counteroffers or seek discounts. This type of conduct is egregious.”
According to the complaint, landlords using YieldStar agreed to provide RealPage with “competitively sensitive data” that was not publicly available. This information was used to generate lowest-price recommendations for landlords and their competitors, depriving the market of independent decision-making. The Department of Justice alleges that this allowed landlords to match pricing and “tip the tide” for those using YieldStar and AIRM.
Additionally, the Department of Justice accuses RealPage of attempting to monopolize the commercial revenue management software market through exclusionary practices that leveraged its “self-reinforcing data and scale advantages.”
During a conference call on the matter on Friday, the Justice Department highlighted portions of the complaint about citations in which RealPage executives said their product helps identify situations that lead to rent hikes. The Justice Department also argued that RealPage’s best practices help landlords eliminate concessions such as a free month’s rent or access to amenities.
Economic Policy Organization Groundwork Collaborative He praised the measure, calling it “a good day for renters and their families, but a bad day for predatory landlords.”
“The Department of Justice is right to address the home price gouging crisis that RealPage is exacerbating,” Lindsay Owens, executive director of Groundwork, said in a statement. “Algorithms are being used to unfairly inflate the prices of homes, meat, and more. This price manipulation must stop.”
Department of Justice officials said more landlord defendants may be added to the complaint in the future. Several states are also named as plaintiffs in the case, including North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington.
The Justice Department’s lawsuit is just the latest in a series of antitrust lawsuits filed against RealPage. According to Genuine, At least seven class action lawsuits were filed against the company in 2022, sparked by Exposé ProPublica.
In 2023, a group of renters in Tennessee filed a lawsuit alleging that RealPage was forming a “cartel” of the country’s largest landlords.
The RealPage lawsuit comes after the Justice Department has been involved in years of antitrust litigation against the real estate industry, most notably National Association of Realtorsbrokerages, and multiple listing services allege anti-competitive conduct related to buyer-broker compensation offers negotiated on the MLS.
The NAR’s $418 million settlement with plaintiffs in multiple antitrust class actions in March is sending shock waves through the industry as it tries to implement and adapt to the new rules agreed to in the settlements.
