The US Department of Justice and eight states accused the software company RealPage on Friday of illegally attempting to undermine competition amongst landlords and create a monopoly that harms thousands and thousands of tenants.
RealPage “allows landlords to manipulate, distort and undermine market forces,” the Justice Department said in a Civil motion before the U.S. District Court in North Carolina.
“Essentially, RealPage is an algorithmic intermediary that collects, combines and exploits landlords’ competitive information,” the antitrust criticism states.
“And in doing so, it enriches itself and compliant landlords at the expense of tenants who pay excessive prices and at the expense of honest businesses that would otherwise be competing,” the Justice Department alleged.
Attorney General Merrick Garland put it much more clearly in a press conference Friday morning: “Everyone knows that rent is damn high, and we argue that's one of the reasons why.”
With this lawsuit, the federal government is for the primary time accusing an organization of attempting to systematically undermine the principles of free competition with the assistance of mathematical algorithms.
“Antitrust law will not become obsolete just because competitors find new ways to act together illegally,” Garland said.
“And Americans shouldn't have to pay more rent just because a company found a new way to negotiate with landlords and break the law.”
The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington are supporting the Justice Department in its lawsuit.
RealPage, owned by Private equity firms Thoma Bravo, in a Statement on X The central bank announced that it could defend itself against the allegations and called the lawsuit a “distraction” from the true economic and political problems that cause inflation.
“We are disappointed that after many years of research and cooperation on the antitrust issues surrounding RealPage, the Department of Justice is now bringing a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” RealPage said.
The company added that its revenue management software is “deliberately designed to comply with regulatory requirements, and we have a long history of working constructively with the Department of Justice to demonstrate this.”
The lawsuit, which Garland said was preceded by an almost two-year investigation, is available in the midst of a U.S. presidential election campaign wherein high housing and rental prices have emerged as a central issue.
Democratic candidate Kamala Harris unveiled an economic plan last week that would scale back rental costs, partially by cracking down on the businesses behind price-fixing tools that allow landlords to collude.
The White House declined to comment on the Justice Department's antitrust lawsuit against RealPage.
However, the newspaper included a press release from national economic adviser Lael Brainard saying that President Joe Biden and Vice President Harris “know that too many Americans feel squeezed by high rents.”
“The Biden-Harris administration has made clear that no one should pay higher prices because of corporate violations of the law and continues to support fair and vigorous enforcement of antitrust laws to prevent illegal collusion,” Brainard said.
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