- The Department of Justice said last week that the antitrust case against RealPage and a number of apartment operators should move forward and that apartment operators’ use of a shared algorithm is illegal under the per se rule of antitrust law, assuming the allegations against the company are true, according to The Wall Street Journal. “The alleged scheme constitutes price fixing regardless of whether the competing landlords ever communicated with one another about prices,” DOJ lawyers wrote in a court filing.
- Data and software provider RealPage and the apartment operators are facing allegations from renters in a Tennessee federal court that their use of a pricing system to set rents violates antitrust laws because it limits competition and inflates rents. The company has argued that the allegations don’t show the apartment operators conspired with each other to raise rents.
- In addition to weighing in on the Tennessee case, the DOJ’s antitrust division is investigating RealPage’s business practices. Sources told the Journal that it is considering a potential enforcement action.
The DOJ's actions follow multiple lawsuits and a ProPublica report that investigated RealPage’s pricing model in October 2022.
Following the report, multiple renters filed class-action lawsuits alleging antitrust violations by RealPage and several owners and operators that utilized the company’s revenue management systems. Among other things, they accused property managers of sharing “competitively sensitive information with one another” by using RealPage as a conduit.
In all, more than 30 class-action suits have been filed against RealPage and apartment owners and managers. These cases have been consolidated into one lawsuit that moved forward in U.S. District Court for the Middle District of Tennessee in August when Waverly D. Crenshaw Jr., chief U.S. District Court judge for the Middle District of Tennessee, deferred a series of motions asserting the case should be dismissed, according to Bisnow.
Earlier this month, Washington, D.C., Attorney General Brian Schwalb brought a separate suit against RealPage and 14 landlords, accusing them of “unlawfully colluding” by collectively adopting the rents set by the Richardson, Texas-based company’s technology and “unlawfully agreeing to exchange competitively sensitive data in violation of the District of Columbia Antitrust Act.”
By using RealPage’s revenue management system, landlords inflated the rents in thousands of apartments across the District, which caused renters to pay millions of dollars above what they would have, according to the lawsuit filed in the Superior Court of the District Of Columbia on Nov. 1. The defendants “extracted these inflated rents by agreeing to delegate their price-setting authority to a centralized entity — RealPage — rather than competing on price,” the suit said.
RealPage did not respond to Multifamily Dive’s requests for comments about the DOJ’s court filing and Washington, D.C., suit. Following the initial suit in October 2022, it did provide comment.
“Rent prices are determined by various factors, including supply and demand as well as each property owner’s unique circumstances,” RealPage said in an email to Multifamily Dive. “There is a housing supply shortage and that alone drives prices higher. Occupancy has been at an all-time high.”
RealPage noted that revenue management is used across many industries and that it isn’t the only option for property operators in the U.S.
“RealPage’s revenue management software is purposely built to be legally compliant,” the company said in the statement. “It focuses on the internal supply and demand dynamics at a particular property and does not consider or have any visibility into availability [supply] at competing properties.”
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