DOJ accuses real estate software company of helping landlords collude to raise rents

The U.S. Department of Justice announced Friday that it is suing the real estate company RealPage, alleging it engaged in a price-fixing scheme to drive up rents.

The attorneys general of eight states — North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington — have joined the Justice Department’s antitrust suit filed in federal court in North Carolina.

This is the latest such move to target the company’s software algorithms. The lawsuit alleges that RealPage’s algorithmic pricing lets landlords to effectively collude and set rents above market rate.

“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,” U.S. Attorney General Merrick Garland said in a statement. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents."

The Justice Department says this use of artificial intelligence deprives renters of the benefits of competition. It also accuses RealPage of monopolizing the market.

RealPage has pitched its software as maximizing landlord profits. But the Texas-based company has said it’s not anti-competitive and that it lowers rents when demand drops.