Business
Justice Department to Sue RealPage for Antitrust Violations
The Justice Department is set to sue RealPage for alleged antitrust violations, raising concerns about competition in the rental market. Explore the implications of this legal action and its potential impact on consumers and the industry.
Justice Department Set to File Antitrust Lawsuit Against RealPage
The U.S. Department of Justice (DOJ) is poised to file an antitrust lawsuit as early as Friday against the real estate software firm RealPage. This legal action is based on allegations that the company’s software has facilitated collusion among landlords to artificially inflate rental prices. Sources familiar with the case, who spoke on the condition of anonymity due to the sensitive nature of the matter, indicate that several states—including California, Colorado, Minnesota, and North Carolina—will join the lawsuit.
The forthcoming suit is expected to accuse RealPage of enabling a price-fixing conspiracy that has resulted in rental rates exceeding what would typically be dictated by market forces. This move represents a significant escalation in the government’s ongoing efforts to regulate perceived misuse of technology in the marketplace. Notably, the DOJ has previously taken action against tech giants such as Google, Amazon, Meta, and Apple, citing monopolistic practices that adversely impact consumers.
At the center of the government’s concerns is RealPage’s YieldStar product, a software solution that collects sensitive real estate data. Landlords who subscribe to this software share confidential information regarding rental prices and occupancy rates. Utilizing this data, an algorithm generates pricing recommendations for landlords, which often exceed what would be expected in a competitive market environment. This allegation has been echoed in previous lawsuits filed against RealPage by various state attorneys general.
A spokesperson for the Justice Department declined to provide any comments regarding the impending lawsuit.
RealPage, which is owned by the private equity firm Thoma Bravo, has marketed its software to property owners as a means to outperform market averages by an impressive 3 to 7 percent. The company claims its software is widely utilized across metropolitan areas throughout the United States.
As of now, RealPage has not responded to requests for comment regarding the lawsuit, nor has a representative from Thoma Bravo provided any statements on the matter.