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RealPage maintains it is not price-fixing but is willing to make changes to its system to ease antitrust concerns, the company said Monday in response to a Department of Justice lawsuit against it.
“We made it clear to the DOJ that we believe strongly in the legality of our products, but if there are solutions here that allow us to continue innovating and competing in the market, we’re open to those solutions,” RealPage's outside counsel Stephen Weissman said, according to the Dallas Morning News.
The DOJ sued RealPage Friday after a nearly two-year investigation. The suit alleges RealPage helps landlords inflate apartment rents and avoid market competition with its algorithm-based YieldStar tool, violating the Sherman Antitrust Act.
The YieldStar feature suggests rent levels for multifamily landlords by using proprietary data it collects from property owners. The data mentioned in the lawsuit is taken from multiple sources and is anonymized, Weissman said.
Weissman alleged the DOJ “cherry-picked” information from the platform without proper context. Aspects of RealPage's product that makes it legal were omitted, he said, including that nonpublic data is a “very minor” part of the overall product.
RealPage has also said it serves a significantly smaller portion of the multifamily market than believed, and landlords can use their own judgment to set prices.
The proptech company has been the subject of 30 rent collusion lawsuits, which were rolled into a single suit last August that is ongoing. A separate antitrust suit against RealPage and 14 landlords, brought last year by D.C. Attorney General Brian Schwalb, is also ongoing. AvalonBay Communities' motion to dismiss from that suit was granted, but the judge denied dismissal to Highmark Residential and JBG Smith.
Federal antitrust investigations are heating up nationwide as the government moves full force on its crackdown against rent collusion as prices have risen 33% over prepandemic numbers.
“In the same way that price-fixing is illegal if you’re kind of going in a back room and shaking hands, price-fixing is still illegal if you’re doing it through an algorithm,” Federal Trade Commission Chair Lina Khan said in June. She said the FTC is working to make sure artificial intelligence isn't being used to collude and inflate rent.
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