The Justice Division on Friday filed an antitrust lawsuit towards RealPage, a property administration software program supplier, alleging it enabled a collusion amongst landlords to inflate rents for tens of millions of People. 

The criticism claims the Richardson, Texas-based firm and its opponents engaged in a price-fixing scheme by sharing nonpublic, delicate data, which RealPage’s algorithmic pricing software program used to generate pricing suggestions. The corporate changed competitors with lease coordination to the detriment of renters throughout the U.S., in response to the go well with, monopolizing the market by its income administration software program which was utilized by landlords to maximise lease prices. 

The DOJ is joined by the attorneys normal of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington. The criticism alleges that RealPage violated sections 1 and a pair of of the Sherman Act, an antitrust regulation.

“People shouldn’t need to pay extra in lease as a result of an organization has discovered a brand new option to scheme
with landlords to break the regulation,” Legal professional Common Merrick B. Garland mentioned in a press release Friday. “We allege that RealPage’s pricing algorithm permits landlords to share confidential, competitively delicate data and align their rents. Utilizing software program because the sharing mechanism doesn’t immunize this scheme from Sherman Act legal responsibility, and the Justice Division will proceed to aggressively implement the antitrust legal guidelines and shield the American folks from those that violate them.”

Deputy Legal professional Common Lisa Monaco mentioned RealPage violated a century-old regulation in a contemporary method, by utilizing an AI-powered algorithm to coordinate lease costs, “undermining competitors and equity for shoppers within the course of.”

“Coaching a machine to interrupt the regulation continues to be breaking the regulation. At present’s motion makes clear that we are going to use all our authorized instruments to make sure accountability for technology-fueled anticompetitive conduct,” she mentioned in a press release. 

RealPage claims the allegations towards the corporate are false, and insists that RealPage prospects resolve their very own lease costs and may reject the algorithm’s suggestions. The corporate added that it makes use of knowledge responsibly. 

“RealPage’s income administration software program is purposely constructed to be legally compliant, and we’ve got a historical past of working constructively with the DOJ to point out that,” a spokesperson for the corporate mentioned in a press release to CBS Information. 

The lawsuit comes as People battle to afford requirements from housing to groceries, with excessive housing prices contributing to persistent inflation.

“As People battle to afford housing, RealPage is making it simpler for landlords to coordinate to enhance rents,” mentioned Assistant Legal professional Common Jonathan Kanter of the Justice Division’s Antitrust Division. “At present, we filed an antitrust go well with towards RealPage to make housing extra reasonably priced for tens of millions of individuals throughout the nation. Competitors – not RealPage – ought to decide what People pay to lease their properties.”  

RealPage acknowledged that its product was designed to maximise earnings for landlords, in response to the go well with, by describing it as “driving each doable alternative to extend worth.”

A landlord praised RealPage’s software program, saying they favored it as a result of the algorithm “makes use of proprietary knowledge from different subscribers to counsel rents and time period. That is basic worth fixing…”

— CBS Information’ Robert Legare contributed reporting