DOJ Reaches Settlement in RealPage Rent-Fixing Case
▼ Summary
– The Department of Justice reached a settlement with RealPage over allegations that its rent-setting software engaged in collusion to increase rental prices.
– RealPage’s software was accused of combining private data from competing landlords to provide daily rental price suggestions, encouraging synchronized rent hikes.
– Under the settlement, RealPage must only use landlord data that is at least 12 months old and redesign features that discourage price reductions or encourage price matching.
– The company is barred from offering hyperlocalized pricing information, which was described as driving up rents block-by-block.
– RealPage denies any wrongdoing, but the DOJ stated the settlement prevents the company from coordinating pricing with its customers.
The Department of Justice has finalized a settlement with RealPage, the prominent property management software firm accused of orchestrating a scheme to artificially inflate rental costs across the United States. This landmark agreement imposes strict new constraints on how RealPage gathers and utilizes sensitive pricing data, directly addressing allegations that the company’s practices suppressed market competition and harmed tenants financially. The settlement, pending judicial approval, fundamentally alters the operations of a platform used by countless landlords nationwide.
Federal prosecutors, joined by multiple state attorneys general, initiated an antitrust lawsuit last year targeting RealPage’s core business model. The legal challenge centered on the company’s proprietary algorithm, which allegedly aggregated confidential, real-time data from rival property managers. This information was then used to generate daily rent recommendations for participating landlords. According to the DOJ, this system created a feedback loop: when one landlord raised prices based on the software’s suggestion, competing properties received automated prompts to follow suit, effectively synchronizing rent hikes across entire markets.
Should the court endorse the proposed settlement, RealPage will face significant operational changes. The company will be prohibited from using any landlord-provided data that is less than twelve months old to fuel its pricing algorithm. Furthermore, RealPage must eliminate or substantially redesign software features that actively discourage property owners from lowering rents or that push them to automatically match competitors’ pricing. A particularly contentious practice known as “hyperlocalized pricing” will also be banned; officials described this tactic as enabling rent increases on a “block-by-block” basis, intensifying affordability pressures in specific neighborhoods.
“RealPage was replacing competition with coordination, and renters paid the price,” stated Assistant Attorney General Abigail Slater. She emphasized that the settlement’s primary achievement is halting the company’s ability to facilitate pricing coordination among its client landlords. While RealPage has publicly denied any legal wrongdoing, the mandated changes aim to dismantle the mechanisms federal investigators believe were instrumental in driving the nationwide surge in rental costs. This case highlights growing regulatory scrutiny of algorithms and data-sharing practices in property management and other industries.
(Source: The Verge)
