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The Department of Justice and eight states’ attorney generals filed an antitrust lawsuit against rental software company RealPage on Friday, accusing it of using algorithms to drive up rent prices nationwide. The suit alleges RealPage’s software, YieldStar, gathers sensitive information from landlords and rental companies, which it feeds into algorithms that recommend prices and practices that limit competition and force renters to pay more.
“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,” Attorney General Merrick Garland wrote in a DOJ press release.
RealPage’s software reportedly manages more than 24 million rental units globally. The DOJ’s complaint accuses the company of contracting with competing landlords who agree to share “nonpublic, competitively sensitive information” about rental rates and other lease terms. RealPage then trains YieldStar’s algorithms, which generate pricing and other competitive recommendations “based on their and their rivals’ competitively sensitive information,” according to the DOJ.
The DOJ was joined in its suit by the attorney generals of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. It filed the lawsuit in the US District Court for the Middle District of North Carolina, accusing the company of violating Sections 1 and 2 of the Sherman Act. The 1890 law is considered the bedrock of US antitrust actions.
In addition, the lawsuit accuses RealPage of monopolizing the rental market in a feedback loop that “strengthens RealPage’s grip on the market,” making it harder for “honest businesses to compete on the merits.”
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