The Justice Department and attorneys general from eight states have sued RealPage Inc. for its alleged unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.
RealPage deprives millions of renters of the benefits of competition on apartment leasing terms, the suit says. Asserting the company has violated Sections 1 and 2 of the Sherman Act, the complaint was filed today in the U.S. District Court for the Middle District of North Carolina. Attorneys general from North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington joined the DOJ.
The complaint alleges:
- RealPage contracts with competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates and other lease terms to train and run RealPage’s algorithmic pricing software.
- The software generates recommendations, including on apartment rental pricing and other terms, for participating landlords based on their and their rivals’ competitively sensitive information.
- In a free market, these landlords would otherwise be competing independently to attract renters based on pricing, discounts, concessions, lease terms, and other dimensions of apartment leasing.
- RealPage uses this scheme and its substantial data trove to maintain a monopoly in the market for commercial revenue management software. The complaint says RealPage commands 80% of the market.
Read algorithmic price fixing commentary by Jonathan Rubin:
· Algorithmic Price-Setting by Multiple Competitors is a U.S. Antitrust Enforcement Priority
· Algorithmic Pricing Agents and Price-Fixing Facilitators: Antitrust Law’s Latest Conundrum
