RealPage Antitrust Deal Is ‘Very Good For Landlords,’ With Narrow Focus On Data

The federal antitrust suit filed against software firm RealPage in August 2024 sent a wave of hesitation and confusion across commercial real estate as the federal government took aim at technology used to help set rents at roughly 3 million apartment units.

A little over a year later — and after dozens of landlords have been ensnared by the case and others like it — the two sides reached a deal that will put guardrails on how RealPage can suggest rents and train its artificial intelligence-powered models.  

The settlement stops well short of a sweeping overhaul or outright ban of algorithmic rent-setting that critics had sought. Instead, the consent decree largely formalizes existing restrictions while mapping them onto the types of data that RealPage uses. 

“Conducting market surveys remains lawful. You just have to do it in a way that is focused on noncompetitively sensitive information, public information,” said Michelle Mantine, who leads the antitrust group at law firm Reed Smith, which isn't involved in the case. “The consent decree was a good reemphasis of some of the general key principles of antitrust for appropriate information sharing.” 

The Department of Justice alleged that RealPage’s software enabled rent coordination between landlords because it leveraged nonpublic, sensitive information about their competitors’ buildings. 

The government argued that property owners were working together — sometimes unknowingly and sometimes with a wink and a nod — by feeding their data into an algorithm that suggested rental rates for millions of units in buildings across the country. 

RealPage and its allies have consistently said the software, then known as Yieldstar and now called AI Revenue Management, simply follows market trends.

They point to cities like Austin, where rents have declined despite a high number of RealPage customers in the market, as evidence the software isn't negatively impacting consumers or the broader market.  

“We have long made the argument that this is a distraction from the real problem in the marketplace, which is a massive housing undersupply leading to housing affordability challenges. Technology is being used as a scapegoat,” said Kevin Donnelly, executive director at the Real Estate Technology & Transformation Center, a Washington, D.C.-based industry group.

RealPage says in court filings that it is already complying with the consent decree while it waits for final sign-off from the North Carolina judge overseeing the antitrust case. The firm told customers in a fact sheet released the same day as the consent decree that it was already in compliance with nearly all of the deal terms. 

The settlement outlines what types of data can be used to train the AI models that underpin its software. For rent price recommendations, which are generated daily, RealPage’s software can leverage any type of data about the specific property, any building in the landlord’s portfolio and any publicly available information.

That includes data about competing properties so long as it is publicly available. Rental rates, concessions and layouts found in an online listing are free to use, but RealPage can’t — except under narrow circumstances — use non-public data information like building occupancy, effective rents and renewal rates in its daily recommendations.

If a customer independently inputs any data about a competing property then that data can be used to inform suggestions for that customer’s rents. RealPage is prohibited from asking or encouraging landlords to gather information about competing properties and add it to their system.

“The settlement is very good for landlords, or anyone else in that position using an algorithm,” said Eleanor Fox, an antitrust specialist and law professor emerita at New York University.

The consent decree also defines what data RealPage can use to train its AI models. That data must be at least a year old and from an inactive lease, but is otherwise generally not bound by the same public or private distinction that applies to the daily suggestions. 

“It is a green light for a lot of collaboration through an intermediary,” Fox said of the deal.

RealPage has previously said its model training was already backward-looking and that the vast majority of the data it was using for its daily algorithm was also already in compliance with the settlement terms.

Mantine said RealPage was largely agreeing to follow existing law. 

“I don't see it as anything fundamentally new,” she said. “What it does is takes the basic principles of information-sharing in antitrust law and applies that to the context of AI and algorithms.”

The lack of significant reforms have chafed some tenant advocates who were looking for stronger tenant protections.  

K Agbebiyi, the senior housing campaign coordinator at the Private Equity Stakeholder Project, said the consent decree amounted to a slap on the wrist for a firm that illegally helped landlords collect, by one estimate, nearly $4B in inflated rents in 2023. 

RealPage, which is backed by private equity giant Thoma Bravo, will still be able to utilize a broad-enough swath of data and use its feature set to continue doing the same types of activities that initially caught regulatory scrutiny, Agbebiyi said. 

“This just leaves the opportunity open for them to engage in more sophisticated price collusion,” they said.

Members of PESP, which advocates against private equity ownership across several economic sectors, have met with Thoma Bravo investors to discuss the private equity firm's investment in RealPage.

Thoma Bravo declined Bisnow’s request for comment. 

Stephen Weissman, a Gibson Dunn attorney representing RealPage in the antitrust case, said the company's software created a more efficient multifamily ecosystem that ultimately benefited renters.

“These efficiencies include, among many others, better forecasting a property’s upcoming vacancies which often lead to lower rents to fill units quicker,” Weissman said in an email. 

RealPage’s software attracted public and regulatory scrutiny after a 2022 ProPublica investigation. 

If the consent decree is adopted, it is far from the final action in RealPage’s multifront fight with regulators and elected officials. The software firm made its first deal with a state in September, but it continues to face pressure from other state prosecutors and is being sued in a sprawling class-action lawsuit. 

Nine states that joined the federal antitrust lawsuit have yet to reach a deal with RealPage.

The consent decree doesn’t have a direct legal consequence for those other suits, but it could present a framework for other settlements. The federal government isn’t legally able to ask RealPage to pay a penalty in the antitrust case, but states can seek civil penalties and could look to settle on terms similar to the federal deal but with an added financial component. 

There’s little expectation on all sides of the issue that any of the deals will lead to a seismic shift in how technology is integrated in the multifamily market and broader commercial real estate sector. Regulators have instead focused on the inputs that go into the tools.  

“We've really been focused more on a holistic conversation about the positive role of technology in the marketplace,” said Donnelly, from proptech industry group RETTC. “Revenue management is widely used across industries, across the economy. The use of data and the use of technology overwhelmingly is having a positive impact on the marketplace.”

RETTC unveiled an AI Governance Framework last month to provide guidelines for responsible innovation and housing affordability. The key to a successful AI implementation is deploying solutions that are transparent, explainable and accountable, Donnelly said. 

Donnelly declined to say whether any software currently on the market met those standards.

"Real estate and housing providers, as well as our technology partners, are working towards this every day," he said.