The Department of Justice filed an antitrust lawsuit against RealPage on Friday morning, alleging its software enables landlords to collude on rent.
North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington are also parties to the suit, the New York Times reported.
The DOJ accused RealPage of facilitating a price-fixing conspiracy that raised rents across the country.
RealPage’s YieldStar software collects confidential data; landlords who subscribe to the software can contribute their information to the database. An algorithm then spits out suggestions for what landlords should charge renters, often producing a higher number than a competitive market would, according to the DOJ.
“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,” Attorney General Merrick Garland said in a statement.
RealPage’s own words may be helping the DOJ build its case, as the company advertises its software as a way to “outperform the market by 3 percent to 7 percent,” according to its website. Executives have said the software helps landlords maximize prices and dodge competition, according to the complaint.
A spokesperson for RealPage said the company’s software was “purposely built to be legally compliant.” The spokesperson added that the company has successfully worked with the DOJ in the past, pointing to its 2017 acquisition of Lease Rent Options.
Federal action against RealPage seemed likely when states coalesced around the company. The DOJ opened a criminal probe into the company behind the scenes and dozens of class-action lawsuits have been filed by renters after an October 2022 investigation by ProPublica.
Federal regulators have been looking into restricting algorithmic rent pricing affecting American consumers. In San Francisco, a proposal is in place to ban rent-calculating software.
This summer, RealPage laid off hundreds of workers as it dealt with its legal troubles.
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