What Occurred: The Division of Justice and Texas software-maker RealPage introduced Monday that they’ve reached a settlement in a case involving price-fixing allegations in a number of the nation’s largest rental markets.
At situation was algorithmic rent-setting software program the tech firm bought that prosecutors mentioned enabled landlords to compete much less and enhance costs in house buildings in ways in which might violate antitrust legal guidelines. The proposed settlement, which should now be accredited by a decide, mentioned RealPage will cease providing software program that makes use of nonpublic, “competitively delicate” information shared amongst landlords to advocate how a lot to cost tenants, officers mentioned.
Underneath the settlement, RealPage will cease conducting market surveys to collect such info, and it agreed to not talk about pricing methods or traits primarily based on nonpublic information at conferences it holds for property managers, officers mentioned. The corporate additionally should take away or redesign software program options that prohibit hire decreases or align pricing amongst rivals, they mentioned.
A court-appointed monitor will guarantee compliance with the settlement, whether it is accepted. The corporate additionally agreed to cooperate with prosecutors of their lawsuit in opposition to property managers which have used its software program.
A 2022 ProPublica investigation confirmed RealPage was serving to landlords determine rents in a means that authorized consultants mentioned might lead to cartel-like conduct. The DOJ additionally sued six massive landlords, accusing them of utilizing algorithmic software program to work collectively and lift rents. Some have reached settlements with prosecutors.
What They Stated: The Justice Division mentioned in a press release that “the proposed settlement would assist restore free market competitors in rental markets for tens of millions of American renters.”
“Competing firms should make impartial pricing selections, and with the rise of algorithmic and synthetic intelligence instruments, we’ll stay on the forefront of vigorous antitrust enforcement,” Assistant Lawyer Normal Abigail Slater mentioned.
RealPage mentioned in a press release on its web site that the settlement “supplies higher certainty for housing suppliers and know-how innovators that income administration software program will be operated confidently and in compliance with the views of federal antitrust enforcers.”
“By all of it, our groups remained centered on serving clients and advancing the know-how the trade depends on on daily basis,” mentioned Dirk Wakeham, RealPage’s president and CEO. “We’re happy to have reached this settlement with the DOJ, which brings the readability and stability we’ve got lengthy sought and permits us to maneuver ahead with a continued give attention to innovation and the shared purpose of higher outcomes for each housing suppliers and renters.”
The settlement didn’t embody admissions of wrongdoing, RealPage mentioned, and doesn’t contain monetary penalties.
The corporate mentioned there could be no disruption to its shoppers’ operations, saying that the settlement would formalize software program modifications that have been “already made or deliberate” and that “all RealPage options stay absolutely obtainable, compliant, and configurable to fulfill evolving authorized necessities.”
Stephen Weissman, an lawyer for the corporate, mentioned RealPage believes its use of information has led to “decrease rents, much less vacancies, and extra procompetitive results.”
RealPage declined to remark additional on the settlement.
Background: The proposed settlement is the most recent growth following ProPublica’s 2022 investigation. Dozens of tenants sued RealPage after the preliminary story. The Biden Justice Division filed an antitrust criticism in opposition to the corporate in 2024, and in January, it sued six of the nation’s largest landlords, together with Greystar, accusing them of improperly working collectively to lift rents. Prosecutors mentioned that one landlord instructed RealPage that it began rising rents inside every week of adopting the software program and, inside 11 months, had raised them greater than 25%.
The litigation, which continued beneath the Trump administration, was joined by at the least 10 attorneys basic, together with the one for California, the nation’s most populous state — house to roughly 17 million renters.
Senators have additionally held hearings and launched laws searching for to ban the usage of hire algorithms like RealPage’s. And on the native stage, cities across the nation, together with San Francisco, Philadelphia and Minneapolis, moved to bar landlords from utilizing related algorithms to set rents.
Why It Issues: The Biden DOJ’s strikes in opposition to RealPage — and its landlord clients — for utilizing shared information and know-how have been seen as a sign that authorities have been prepared to wade right into a fraught nook of federal antitrust legislation.
Previously, collusion occurred with “a proper handshake in a clandestine assembly,” federal prosecutors wrote in a single submitting. “Algorithms are the brand new frontier.”
Trump’s DOJ continued to prosecute the case this yr even because the administration retooled the division and scaled again on conventional enforcement priorities like police misconduct.
The proposed settlement follows the DOJ’s August announcement that it had made a cope with Greystar, the nation’s largest landlord, to settle the federal government’s claims associated to its use of RealPage’s algorithmic rent-setting software program. Greystar doesn’t admit wrongdoing as a part of the settlement and mentioned it accepted the deal “to clarify the federal government’s interpretation of the legislation and to make sure we proceed to do issues the fitting means.”
