A federal judge has rejected RealPage’s request to dismiss an antitrust suit brought against it by a group of multifamily tenants, ruling the tenants showed enough cause for RealPage to confront the claims in court. However, the court did grant a motion to dismiss a similar student housing antitrust suit.
Over the past two years, multiple renters have 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 continues to move forward in the U.S. District Court for the Middle District of Tennessee.
In the Dec. 29 decision rejecting RealPage’s request, Chief U.S. District Court Judge Waverly Crenshaw was skeptical about multifamily operators’ motivation for sharing information with RealPage.
Crenshaw wrote that plaintiffs' most persuasive evidence of an agreement between RealPage and the property management companies was that the apartment operators handed over their “proprietary commercial data” to the Richardson, Texas-based property management software company. When they did this, they knew that RealPage would require the same action from their competitors, and it would then use that data to suggest rental prices.
“It would clearly not be in any individual defendant’s economic self-interest to contribute its data to RealPage without knowing that it would benefit from its horizontal competitors doing the same,” Crenshaw said in the decision to allow the multifamily suit to continue.
In tossing out the student complaint, Crenshaw noted that the plaintiffs did not go to the same lengths as the multifamily tenants to show the pricing power of operators that used RealPage’s software.
Other legal actions
In November, 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.”
Also in November, the Department of Justice weighed in, arguing the complaints adequately alleged violations of Section 1 of the Sherman Act. In addition to weighing in on the Tennessee case, the DOJ’s antitrust division is investigating RealPage’s business practices.
RealPage did not respond to Multifamily Dive’s requests for comments about the DOJ’s court filing, the Washington, D.C., suit or Crenshaw’s recent decision. 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 its system 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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