On Friday, the U.S. Department of Justice, along with attorneys general from eight states, filed a lawsuit against RealPage, a software company, accusing it of illegally collaborating with landlords to reduce competition and keep rent prices high, affecting millions of tenants.
The civil lawsuit, filed in U.S. District Court in North Carolina, alleges that RealPage uses its technology to manipulate and distort market dynamics. “RealPage operates as a digital intermediary that aggregates and misuses critical rental property data,” according to the lawsuit.
The lawsuit alleges that the company profits at the expense of tenants, who face inflated prices, and honest businesses that are deprived of fair competition. Attorney General Merrick Garland emphasized the severity of the problem in a press conference, saying, “High rents are a significant concern, and this case highlights a contributing factor.”
This is the first legal challenge in which the government accuses a company of using algorithms to circumvent free-market principles.
Garland further observed: “The principles of antitrust law remain relevant, no matter how sophisticated the methods of collusion become.”
He added: “It is unfair that Americans have to endure higher rents because a corporation conspires with landlords in illegal activities.”
States joining the lawsuit include North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. RealPage, which is owned by private equity firm Thoma Bravo, has yet to comment on the allegations.
This lawsuit is part of a larger narrative of rising housing costs that is becoming a central issue in the current U.S. presidential race. Just last week, Democratic frontrunner Kamala Harris proposed an economic strategy aimed at reducing rent costs by targeting unethical pricing practices among landlords.
While the White House has yet to officially comment on the lawsuit, Lael Brainard, the White House’s national economic adviser, issued a statement emphasizing the Biden-Harris administration’s commitment to addressing the burden of high rents. “The administration is committed to vigorously enforcing antitrust laws to prevent illegal corporate practices that result in undue costs for Americans,” Brainard said.
This development is part of CNBC’s ongoing coverage, which continues to provide in-depth analysis and updates on this important legal and economic story.