The U.S. Department of Justice (DOJ), which has been looking into rent-settling algorithms, is now considering a civil lawsuit against a software company that it believes allows rental price collusion among large landlords to fix prices, according to ProPublica.
The DOJ staff has recommended a lawsuit against RealPage Inc., a software company used by landlords across the country, according to two people with knowledge of the matter, ProPublica reported.
The civil lawsuit against RealPage “would accuse the company of selling software that enables landlords to illegally share confidential pricing information in order to collude on setting rents,” the report says.
“The recommendation escalates the investigation to the antitrust division’s leadership, including Assistant Attorney General Jonathan Kanter. Also on the table for a complaint is the landlords’ ability to use the software to match vacancy rates, essentially restricting supply, at competing buildings in the same rental market, said the people, who were granted anonymity to discuss a confidential investigation,” ProPublica said in the report.
RealPage and the property companies have argued in court that the allegations do not support any agreement to fix prices. Among their arguments, the property owners and managers say there is no evidence of any conspiracy of rental price collusion, beyond that they are all clients of RealPage.
Multiple tenants across the country have sued RealPage claiming the tech company’s apartment software led to rental price collusion by landlords to inflate rents. The lawsuits from around the country were consolidated in federal court in Nashville.
RealPage and dozens of property owners and managers are already the targets of a class-action lawsuit brought by renters. There are also suits filed by attorneys general in Washington, D.C., and Arizona. The North Carolina attorney general recently announced that his office is also investigating.
In Arizona, Attorney General Kris Mayes has filed a lawsuit against RealPage, Inc. and nine major residential apartment landlords operating in Arizona for price-fixing and conspiring to illegally raise rents for hundreds of thousands of Arizona renters in the Phoenix and Tucson metro areas, according to a release.
Read the full report from ProPublica here.
