DOJ sues software company controlling 80% of rental market – accuses of price fixing rents in CA

Photo byThe HD Post

CALIFORNIA – The Department of Justice (DOJ) announced August 23, that they – along with the California Attorney General, filed a civil antitrust lawsuit against software company RealPage Inc for violating antitrust laws with their pricing algorithm.

The DOJ complaint alleges that RealPage’s revenue management software ingests on a daily basis nonpublic rental rates, future apartment availability, and changes in competitors’ rates and occupancy.

“As competitor-landlords increase their rents, RealPage’s software nudges other competing landlords to increase their rents as well. RealPage calls this “maximiz[ing] opportunity[.],” said the complaint.

The DOJ says by RealPage’s own account, the software company controls at least 80 percent of the market.

“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,” said United States Attorney General Merrick B. Garland.

Antitrust law promotes competition

Antitrust law promotes competition by prohibiting business practices that unfairly limit competition, create monopolies, or restrain trade.

It aims to protect consumers from inflated prices and ensure a competitive market.

According to the complaint, RealPage software is aimed at “driving every possible opportunity to increase price.”

The DOJ observed among landlords that “there is a greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,” reads a statement from the complaint.

The department goes on to say that is not how the free market works. A free market requires that landlords compete on the merits, not coordinate pricing.

“For example, landlords could lower rents or provide other financial concessions, like free months of rent, or with investments in amenities like gyms, grilling areas, or pools,” reads a statement from the complaint.

They say the fear of losing a renter to a competitor should motivate rival landlords to compete vigorously.

The Justice Department, together with the Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed the lawsuit in the U.S. District Court for the Middle District of North Carolina.

The case name is State of Washington vs. RealPage Inc.

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