The Department of Justice (DOJ) and attorneys general from eight states are suing RealPage, a property pricing software provider, alleging it reduces competition by allowing property owners to collaborate and illegally drove up rental prices.
The case highlights concerns that new technology, like algorithms, might facilitate illegal price-fixing.
The government claims RealPage’s YieldStar software allows landlords to share confidential information, such as competitors’ data, leading to coordinated rent increases. It also accuses the company of monopolizing the rent-setting software market, which it dominates with an 80% share.
RealPage denies these allegations, stating that its tech tool is legally compliant and that property owners aren’t required to follow its price recommendations.
The lawsuit is important because it’s the first time the DOJ has majorly targeted software technology in an antitrust case. It is part of a broader government effort to regulate large companies’ influence in the housing market.
There are proposed legislations to ban algorithmic pricing systems and limit tax benefits for companies that own single-family rental homes.
President Joe Biden recently called for annual rent increases to be capped at 5%, and Vice President Kamala Harris has vowed to crack down on rental pricing software if elected.