RealPage faces accusations of using algorithms to hike rent prices across the country

The U.S. Department of Justice has filed an antitrust lawsuit against real estate software company RealPage, accusing it of facilitating collusion among landlords through its algorithm to artificially inflate rent prices across the country.
The lawsuit, supported by North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington, claims that millions of renters have been affected by the alleged price manipulation.
According to The New York Times, RealPage’s software, YieldStar, collects data from landlords, including rent prices and occupancy rates, and provides users with an algorithm designed to maximize their profit by as much as 3% to 7%.
Diana Moss, director of competition policy at the Progressive Policy Institute, told The New York Times that the algorithm functions as a “mechanism for communication” between landlords.
“That is as approachable and actionable under U.S. antitrust as any form of communication we’ve seen in past cases in the nondigital era,” Moss said.
The lawsuit is part of a broader crackdown on alleged monopolistic practices in the tech industry, including ongoing cases against Google, Apple, Amazon and Meta.
According to The New York Times, the Justice Department said that this is the first major case where an algorithm plays a central role in price manipulation.
RealPage has denied the allegations, asserting in a statement on its website, “RealPage’s revenue management software contributes to a healthier and more efficient rental housing ecosystem.”
The company also cited other factors contributing to rising rent prices, such as increased demand for rental housing, inflation and higher mortgage rates.
The complaint argues that, in a free market, landlords would compete to attract renters, but RealPage’s software allegedly enables them to collaborate on price-fixing in violation of antitrust laws.
“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.
The Justice Department also referenced statements from RealPage executives claiming their software would allow landlords to align prices and reduce competition.
“There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down,” one executive was quoted as saying.