RealPage Reaches Settlement with Justice Department Over Rent-Pricing Algorithm
The Department of Justice (DOJ) and RealPage Inc. have reached a proposed settlement regarding the company's rent-pricing software. The agreement aims to address allegations of "algorithmic collusion," where prosecutors claimed the software allowed landlords to coordinate rent increases using confidential data. The settlement, announced Monday, concludes a year-long federal antitrust lawsuit initiated by the Biden administration. RealPage will not pay any damages or admit wrongdoing as part of the deal, which requires approval by a judge.
Settlement Details
RealPage's software provides daily recommendations to landlords nationwide for pricing available apartments. Critics of the software have argued that its access to a vast trove of confidential data enabled clients to potentially charge higher rents.
Gail Slater, head of the DOJ's antitrust division, stated that RealPage "was replacing competition with coordination." Under the terms of the proposed settlement, RealPage can no longer use real-time nonpublic data to determine its price recommendations. Instead, any nonpublic data utilized to train the software's algorithm must be at least one year old. Slater commented that these changes are intended to promote "more real competition in local housing markets" and ensure "rents set by the market."
Stephen Weissman, an attorney for RealPage, stated the company is pleased the DOJ worked with them to settle the matter. Weissman asserted that "misinformation" has circulated regarding the software's functionality. He maintained that RealPage's historical use of aggregated and anonymized nonpublic data, which he said included rents typically lower than advertised rates, has historically led to "lower rents, less vacancies, and more procompetitive effects."
Broader Impact and Related Actions
In recent months, more than two dozen property management companies have reached various settlements concerning their use of RealPage software. This includes Greystar, identified as the nation's largest landlord, which agreed to pay $50 million to settle a class-action lawsuit and an additional $7 million to settle a separate lawsuit filed by nine states.
Governors in California and New York recently signed laws addressing rent-setting software. Furthermore, cities such as Philadelphia and Seattle have passed ordinances against the practice. Ten states—California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington—had joined the DOJ's antitrust lawsuit but were not part of Monday's specific settlement.