Department of Justice Purportedly Preparing Lawsuit Against RealPage

Ryan J. Farrick — July 14, 2024

Department of Justice signboard. Image via Ryan J. Farrick.

The Department of Justice is allegedly concerned that RealPage’s products act as a shield for landlords, who can use the company’s services to share information about rental prices and vacancy rates to artificially limit supply and thereby inflate costs.

The federal Department of Justice is planning to file a lawsuit against RealPage Inc., a software company that several state attorneys general have already accused of colluding with landlords to set high rents in already-expensive markets.

According to POLITICO, Justice Department staffers have already recommended filing a civil lawsuit against RealPage. The claims have purportedly been referred to the department’s antitrust division.

RealPage, which sells its rental-management software to property management companies across the United States, lets landlords estimate supply and demand on a per-unit basis.

The Department of Justice is allegedly concerned that RealPage’s products act as a shield for landlords, who can use the company’s services to share information about rental prices and vacancy rates to artificially limit supply and thereby inflate costs.

As LegalReader.com has reported before, state- and district-level prosecutors have already pressed claims against RealPage. D.C. Attorney General Brian Schwalb, for instance, has said that RealPage has helped create a so-called “housing cartel.”

Gavel; photo by Sora Shimazaki from Pexels.com.

“RealPage and the defendant landlords illegally colluded to artificially raise rents by participating in a centralized, anticompetitive scheme, causing District residents to pay millions of dollars above fair market prices,” Schwalb said in a 2023 statement. “Defendants’ coordinated and anticompetitive conduct amounts to a District-wide housing cartel.”

Schwalb’s office claims that RealPage was used to set rents for more than 50,000 apartments throughout the District.

However, RealPage has since responded to these allegations, saying that there is no evidence of conspiracy outside of different landlords choosing to use RealPage to set rates.

“These factual inaccuracies threaten to undermine the essential benefits RealPage’s solutions provide to both renters and housing providers,” the company wrote in a June press statement. “In fact, RealPage’s revenue management software contributes to a healthier and more efficient rental housing ecosystem.”

POLITICO notes that RealPage spokesperson Jennifer Bowcock said that, though the company does not comment on rumors or pending litigation, the Department of Justice “extensively reviewed” RealPage products “in 2017, without objecting to, much less challenging, any feature of the products.”

“RealPage’s revenue management products are fundamentally the same today as they were when the [Department of Justice] reviewed them in 2017,” Bowcock said.

But, last year, a Tennessee-based federal judge refused to dismiss a similar class-action lawsuit against RealPage, saying that the claim “unequivocally alleges that RealPage’s revenue management software inputs a melting pot of confidential competitor information through its algorithm and spits out price recommendations based on that private competitor data.”