Recently, US prosecutors have unveiled antitrust charges against RealPage, a property management software company, accusing them of utilizing algorithms to facilitate collusion among landlords. This alleged behavior has raised concerns about the impact on renters across various US markets. The Department of Justice, along with eight US states, has filed a civil lawsuit against RealPage, claiming that the company maintains a monopoly over commercial revenue management software.
The lawsuit asserts that RealPage’s algorithmic software allows competing landlords to share real-time pricing inputs and other sensitive data, leading to pricing recommendations that harm consumers. This marks the first time that US prosecutors have targeted anticompetitive conduct centered on computer algorithms. The Attorney General, Merrick Garland, has described RealPage’s actions as “classic price-fixing,” emphasizing the importance of competition among landlords in protecting renters.
In response to the lawsuit, RealPage has vowed to vigorously defend itself and has labeled the allegations as groundless. The company argues that the lawsuit is a distraction from the underlying issues driving rental inflation, such as housing supply shortages and high mortgage rates. RealPage has expressed disappointment in the DOJ’s decision to pursue legal action and believes that the claims lack merit.
DOJ’s Perspective
Assistant Attorney General Jonathan Kanter highlighted the role of data science experts in uncovering how technology, particularly algorithms, can be misused to distort markets and benefit monopolies. The DOJ has emphasized the significant market presence of RealPage, serving companies with millions of housing units across the US. In some markets, RealPage’s market share reportedly reaches as high as 60 percent, raising concerns about the company’s dominance and potential anti-competitive practices.
The antitrust charges brought against RealPage shed light on the growing scrutiny surrounding the use of algorithms in fostering collusion and undermining competitive markets. The legal battle between RealPage and the US government underscores the complex intersection between technology, market dynamics, and consumer welfare. As the case unfolds, it will be crucial to assess the implications of algorithmic-driven practices on the rental industry and the broader economy.
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