RealPage, Landlords Say DOJ Trying To Improperly Expand Antitrust Law
Software provider RealPage is pushing back on a court filing from the Department of Justice alleging it engaged in price-fixing, claiming the government's attorneys are overreaching and stretching the limits of federal antitrust law.
RealPage and a group of major apartment landlords are defending themselves against a class-action lawsuit in Tennessee federal court, in which a group of tenants have filed suit alleging the company's rent-setting algorithm allows landlords to collude and set rents higher than they would in a competitive market.
The DOJ filed a statement of interest in the case earlier this month, claiming RealPage and the landlord have run afoul of the Sherman Antitrust Act. Government attorneys claimed the RealPage algorithm is essentially price collusion, arguing in the statement that it outsources the decision-making on rent prices to a shared source.
The data provider, as well as a host of major REITs and multifamily property managers, was named in more than 30 lawsuits that were consolidated in Nashville federal court in April, bringing together cases filed by renters from Seattle and Colorado to Boston and New York. A similar suit has also been filed against Yardi Systems and 18 landlords.
In its response, filed Monday, RealPage and the landlords claimed the DOJ's complaint is not “a fair or accurate statement of the law or Plaintiffs’ allegations.” Further, RealPage claims the DOJ's statement is an “attempt to expand the Sherman Act beyond the boundaries of well-established and controlling antitrust jurisprudence.”
The response was first reported by Law360. Landlords listed as defendants responding to the DOJ include UDR, Bozzuto, Brookfield Properties, BH Management, Trammell Crow Residential, Crow Holdings, Bell Partners and Camden Property Trust.
Specifically, the DOJ claimed the landlords using RealPage adopt its pricing recommendations 80% to 90% of the time, the filing says. However, RealPage argues it is in fact “up to 80%-90% of the time” — and by removing the “up to” from its statement, the DOJ altered the meaning.
RealPage and the landlords' attorneys also pushed back on the DOJ’s claim that RealPage rental management software aims to raise pricing by collaboration, arguing that “RealPage explicitly advises users that its RMS may recommend price decreases.”
The DOJ’s attempt to take on RealPage underscores the far-reaching impact the case could have, according to ProPublica, which investigated the company’s practices in 2022. Congress held hearings following ProPublica's investigation, and tenant groups across the country filed lawsuits alleging collusion.
“Algorithms are the new frontier,” DOJ antitrust attorneys wrote in their statement of interest. “And, given the amount of information an algorithm can access and digest, this new frontier poses an even greater anticompetitive threat than the last.”
RealPage has declined to comment on the suit but previously released a statement saying the suits were without merit and “the complaints filed are wrong on both the facts and the law.”