RealPage Inc. Settles with DOJ Over Rent-Setting Software, Avoids Financial Penalties
In a significant legal development, RealPage Inc., a Texas-based software company, has reached a settlement with the Department of Justice (DOJ) regarding its rent-pricing software. This settlement aims to address concerns over what critics termed “algorithmic collusion” in the rental market.
The logo for the Justice Department is seen before a news conference at the Department of Justice on Aug. 23, 2024, in Washington. Mark Schiefelbein/AP
The settlement marks the culmination of a federal antitrust lawsuit initiated during the Biden administration. It will prevent landlords from leveraging RealPage’s software to discreetly monitor competitors and increase rents using confidential data. While RealPage will avoid financial penalties or an admission of guilt, the settlement awaits judicial approval.
RealPage’s software offers daily pricing recommendations to landlords across the country, using a large database of confidential data. Critics argue that this enables landlords to set higher rents. “RealPage was replacing competition with coordination, and renters paid the price,” stated DOJ antitrust chief Gail Slater.
As part of the settlement, the software can no longer utilize real-time data for price setting, relying only on nonpublic data that is at least a year old. This change aims to foster more genuine competition in local housing markets. “It means rents set by the market, not by a secret algorithm,” Slater explained in a video statement.
RealPage attorney Stephen Weissman expressed satisfaction with the resolution, stating, “There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters.”
However, some observers see the settlement as a missed chance to address broader algorithmic price-fixing issues. Lee Hepner from the American Economic Liberties Project criticized the deal, believing RealPage can still influence rental markets with public data.
Recent months have seen over two dozen property management companies settling cases related to RealPage’s software. Notably, Greystar agreed to a $50 million settlement in a class-action lawsuit and an additional $7 million settlement with nine states.
Furthermore, several states and cities, including California, New York, Philadelphia, and Seattle, have enacted measures to curtail rent-setting software usage. Despite joining the DOJ’s lawsuit, ten states were not part of the Monday settlement.
This article was originally written by www.npr.org
