U.S. Antitrust Lawsuit over Rent Hike Collusion Allegations – The New Era of Algorithm-Driven Price Manipulation?

Last week, the U.S. Justice Department alongside North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington filed an unprecedented antitrust lawsuit against real estate software company, RealPage.

The lawsuit alleges that RealPage and its software, YieldStar, orchestrated a wide-ranging price-fixing conspiracy that artificially inflated rental prices for millions in the U.S. beyond market forces.

In a revealing statement, Attorney General Merrick Garland said, “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.” The lawsuit, a first of its kind, puts a spotlight on the role of technology and algorithms in price manipulation.

RealPage's software, YieldStar, gathers private real estate information from landlords who use the software, subsequently generating rent suggestions often higher than fair market prices, thus boosting rents. Consequently, the government has accused RealPage of monopolising the market for software that landlords use to price apartments. RealPage’s software is currently used by properties containing about three million rental housing units, and the company has access to confidential information from more than 16 million units across the country.

These allegations mark a significant escalation in the government’s efforts to regulate technology misuse. Recently, officials have sued tech giants like Google, Amazon, Meta, and Apple over purported monopolistic behaviors. Meanwhile, RealPage has disputed the allegations and pledged to vigorously defend the company's actions. This case is poised to set an important precedent in the intersection of technology and antitrust laws.

- CyberBeat