Welcome to the latest controversy in the world of real estate software. Arizona’s attorney general took legal action against RealPage earlier this year, accusing the company of “corrupting” the Valley’s real estate market. And now, the plot thickens as the Department of Justice has stepped in with an antitrust lawsuit.
The Justice Department’s lawsuit, filed in collaboration with attorneys general from various states, including North Carolina and California, alleges that RealPage has been engaging in an illegal scheme that allows landlords to coordinate and increase rental prices. The crux of the issue lies in RealPage’s algorithm, which provides landlords with recommended rental prices for their apartments.
According to Justice Department officials, this algorithm enables landlords to align their prices and avoid healthy competition that would otherwise keep rents in check. A RealPage executive was even quoted as saying that there is “greater good in everybody succeeding” by not competing against each other in a way that would benefit the entire industry.
Attorney General Merrick Garland emphasized the impact on consumers, stating, “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.”
RealPage, however, has vehemently denied these allegations, labeling them as “false and misleading.” The company argues that its software actually contributes to a more efficient rental housing ecosystem, as landlords have the freedom to set their own rent prices and can reject the recommendations provided by the algorithm.
This legal battle is just one instance of the Biden administration’s aggressive stance on antitrust enforcement. Other tech giants like Apple and Ticketmaster, along with their owners, have also faced similar legal challenges in recent months. With investigations into the roles of Microsoft, Nvidia, and OpenAI in the AI industry underway, it’s clear that the landscape of antitrust regulation is rapidly evolving.
