Two years into the blowback against RealPage for its rent rate algorithm, the company is asking for the case brought by the Department of Justice to be dismissed.
The Richardson-based firm on Tuesday filed a motion to dismiss the antitrust case the DOJ filed in August in federal court in North Carolina. The motion comes on the heels of the re-election of President Donald Trump, who some expect will de-emphasize antitrust enforcement.
RealPage called allegations that it engaged in a price-fixing conspiracy “baseless.” Specifically, it argues the DOJ has failed to show that the company has monopoly power or dampens competition in the market.
The saga began in October 2022 when ProPublica reported that RealPage’s proprietary software — which uses data from other buildings to suggest rents to landlords — was driving up rents.
Class-action lawsuits piled on, and federal and state lawmakers pushed for legislation to address the way algorithms are used to determine rent pricing. The DOJ sued RealPage in August, accusing the company of creating what amounts to a landlord cartel.
Industry insiders have pushed back on what they believe to be an unfair categorization of what’s known as revenue management software — a tool companies have used for pricing since the 1980s.
Stephen Weissman, RealPage’s outside counsel, said in a call with reporters that the DOJ “doesn’t have the facts that it needs” for the claims it’s made in the lawsuit. The DOJ didn’t respond to requests for comment.
One of the sticking points in the monopoly allegation is how to measure RealPage’s market share.
The DOJ in its complaint alleges use of RealPage’s software ranges from about 29 percent to 60 percent in more than 130 markets.
RealPage has a problem with the way these ranges were calculated, including its claim that argues the share should be measured with a broad denominator of all rental units in a particular market, which would put 300-unit buildings in the same category as a duplex. As a result, the share of rental units affected by the software is much smaller than if the number was compared to units in buildings of a particular size.
Weissman claims the options are the same from the point of view of a consumer.
For example, someone looking for rental housing would realistically be looking at a variety of products, which could range from small-format rental properties to huge buildings.
Of course, this is a case that was taken up during the Biden presidency and will most likely stretch into President Trump’s upcoming term. Experts predict a Trump DOJ will pivot from the antitrust enforcement that’s become a priority for Biden’s Justice Department, the Associated Press reported last month.
Trump on Wednesday tapped Gail Slater to head the Department’s antitrust division. He indicated on social media that Slater will focus on reigning in “Big Tech,” namely Google and Apple.
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Weissman told reporters Slater “will be wonderful,” but didn’t issue a prediction for how the transition could change the case.
“We’re hopeful that whether it’s this administration or the future administration, it will appreciate the pro-competitive virtues of our product,” he said.