The Department of Justice filed a civil lawsuit Friday against RealPage Inc., alleging the AI software platform provider’s algorithm allowed landlords across the country to fix rent prices.
DOJ officials say RealPage, based in Texas, contributed to sharp rent increases since the pandemic because its software gives landlords the power to work together to inflate pricing and skirt competition, violating antitrust laws.
“Americans should not have to pay more in rent simply because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick Garland said Friday during a news conference.
The RealPage software recommends rent prices based on its data collection and allows apartment owners to share confidential private information to help set pricing in a form of collusion by landlords, the DOJ claims.
In a statement, RealPage criticized the DOJ’s filing as “devoid of merit,” the Associated Press reported.
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” the company said in the statement provided to AP.
In a statement posted on RealPage’s website in June, the company responded to its critics, saying the real problem is housing affordability.
“The time is now to address a number of false claims about RealPage’s revenue management software, and how rental housing providers operate when setting rent prices,” RealPage CEO and President Dana Jones said at the time. “Housing affordability should be the real focus. RealPage is proud of the role our customers play in providing safe and affordable housing to millions of people. Despite the noise, we will continue to innovate with confidence and make sure our solutions continue to benefit residents and housing providers, alike.”
Eight states joined the DOJ in filing the lawsuit against RealPage: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington.