Janice R. Andrews
The Department of Justice (DOJ) and eight state attorneys general have filed an antitrust case against RealPage, a company that makes software for renting homes. They say that RealPage uses algorithms to raise rent prices across the country, which is a big step in the legal world. This lawsuit was sent to the U.S. District Court for the Middle District of North Carolina. It says that YieldStar, RealPage’s software, has been changing rental prices by getting private information from landlords and using it to suggest high rent prices that hurt competition and make rents go up for renters.
An attorney general said in a news statement, “Americans should not have to pay more rent because a company has found a new way to work with landlords to break the law.” This statement supports the DOJ’s view that RealPage’s actions have hurt customers by making the renting market less fair.
What RealPage Is Said to Do
YieldStar, RealPage’s programme, is said to handle more than 24 million rental units around the world. The DOJ says that the business makes deals with owners that are in competition with it and agrees to share “nonpublic, competitively sensitive information” about lease terms and rental rates. This information is then used to teach YieldStar’s algorithms, which then use secret information about both the company and its rivals to come up with price suggestions. Sections 1 and 2 of the Sherman Act, an important U.S. trade law passed in 1890, are being broken, according to the DOJ. These actions are seen as price fixing and controlling behaviour.
The lawsuit also says that RealPage has set up a feedback loop that strengthens its grip on the rental market, making it harder for other companies to compete fairly. Internal company papers and landlords’ statements say that this approach makes it hard for honest businesses to compete fairly, which hurts customers in the long run by raising rent prices.
Proof Against RealPage
Documents from inside RealPage and signed statements from landlords and workers who have used the software help the DOJ’s case. RealPage has said in response to the complaint that its software is meant to maximise rental income by “driving every possible opportunity to increase price” and stopping a “race to the bottom” when the economy is bad. One RealPage official even said that keeping owners from competing with each other would be good for the business, which shows that they wanted to change the way the market worked.
The claim also talks about a chat in which a RealPage executive told a landlord that the software’s ability to access competitor data could let them raise rents by bigger amounts. One owner called this practice of changing rental prices “classic price fixing,” and it shows how RealPage’s software may have made it easier for illegal planning to happen.
What the lawsuit means for a wider audience
The case is important because it addresses a growing worry about how technology and data are being used in ways that could hurt customers and change markets. The DOJ and the states that are taking part—North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington—are going after RealPage as a sign of a larger crackdown on business practices that hurt competition in the digital age.
It’s possible that if the case wins, it will change how software companies that use data-driven algorithms work in the rental market and maybe even in other fields. It might also make renters more likely to fight unfair pricing and demand more information about how rental rates are set.
What RealPage Says in Defence
RealPage has not yet replied to the case in public. But the company is expected to say that its software is just a way to help rental prices be as low as possible in a competitive market, not a way for people to work together illegally. The result of this case could have a big impact on how data and algorithms are used to set prices in many different areas.
The case that the DOJ filed against RealPage is a turning point in the ongoing discussion about the role of technology in modern markets. It brings up important questions about fairness, openness, and competition in the digital economy, which could have big effects on both renters and owners.
