The U.S. Division of Justice (DOJ) sued RealPage on Friday after a two-year investigation that included an unannounced FBI raid of a nationwide company landlord. The DOJ alleged that Richardson, Texas-based RealPage, which sells actual property software program, decreased competitors amongst landlords and artificially inflated rents for hundreds of thousands of tenants throughout the nation.
“We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents,” legal professional basic Merrick B. Garland said in a press launch.
The DOJ filed the 115-page grievance within the U.S. District Courtroom for the Center District of North Carolina on Friday. The antitrust lawsuit particulars how RealPage signed contracts with landlords who would in any other case be rivals and picked up delicate, detailed details about lease costs, lease phrases, facilities and occupancy charges.
RealPage then allegedly fed the data to its AI-driven algorithm, which gave landlords suggestions on how to value leases and set phrases for rental agreements. The DOJ additionally accused the corporate of making certain landlords accepted its suggestions by sending out pricing advisors to meet with them for “accountability conversations” and including an “auto accept” function so landlords would routinely approve value will increase.
In 2020, RealPage mentioned its software program collected knowledge on 16 million rental items of the 22 million investment-grade house items within the U.S., indicating its broad attain.
U.S. Lawyer Normal Merrick Garland (C), U.S. Deputy Lawyer Normal Lisa Monaco (L) and U.S. Performing Affiliate Lawyer Normal Benjamin Mizer (R). Photograph Credit score: Anna Moneymaker/Getty Photographs
“As Americans struggle to afford housing, RealPage is making it easier for landlords to coordinate to increase rents,” assistant legal professional basic Jonathan Kanter of the Justice Division’s Antitrust Division said, including that “competition – not RealPage – should determine what Americans pay to rent their homes.”
The DOJ filed the lawsuit with the attorneys basic of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. State attorneys basic for Arizona and Washington, D.C., have already taken authorized motion towards RealPage this yr.
Associated: State Attorneys Normal Sue RealPage, Landlords Over ‘Astronomical’ Lease Hikes: ‘This Was Not A Honest Market At Work’
In an announcement, RealPage mentioned the DOJ’s claims had been “devoid of merit” and “will do nothing to make housing more affordable.” The lawsuit “seeks to scapegoat pro-competitive technology,” the corporate claimed.
The non-partisan nonprofit American Financial Liberties Mission (AELP) took a unique stance. In an emailed assertion to Entrepreneur, AELP senior authorized counsel Lee Hepner pointed to RealPage’s personal advertising, highlighted by the DOJ, which said that the corporate took “every possible opportunity” to elevate costs.
“Working people have enough problems affording daily necessities without RealPage bragging that it seizes ‘every possible opportunity’ to increase rents,” Hepner said.
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