RealPage Settles DOJ Antitrust Case Over Alleged Rent-Fixing Algorithm

Landlords' go-to tool to set rent prices to be gutted under RealPage settlement

RealPage has agreed to settle an antitrust lawsuit raised by the Department of Justice, alleging that landlords used its tools to coordinate efforts to artificially raise rental prices across the US. In a press release, the DOJ promised the proposed settlement "would help restore free market competition in rental markets for millions of American renters." For years since the pandemic started, rental prices outpaced inflation, and the DOJ suspected that RealPage was the dominant force driving a market that never favored renters. Recent Bureau of Labor Statistics data covering a 12-month period ending this September showed rents are still rising by 3.5 percent amid an affordability crisis, leaving some US renters in fear of housing instability. In its complaint filed last August, the DOJ alleged that RealPage collected sensitive information daily from landlords, making it easier to see how competitors were pricing units. This information allegedly helped landlords "identify situations" where they could "have a $50 increase instead of a $10 increase" or eliminate "renter-friendly concessions (like a free month's rent or waived fees)" they may have used "to attract or retain renters." "To RealPage, the 'greater good' is served by ensuring that otherwise competing landlords rob Americans of the fruits of competition -- lower rental prices, better leasing terms, more concessions," the DOJ alleged. Under the proposed settlement agreement, RealPage admitted to no wrongdoing and faced no financial penalties. In court filings, the Texas-based company maintained that its "software recommends competitive, or 'market,' prices" and that it did nothing to prevent other commercial revenue management software companies from competing. However, if a court approves the deal, RealPage has agreed to update its software so that rival landlords cannot access "competitively sensitive information to determine rental prices in runtime operation." Additionally, RealPage will "remove or redesign features that limited price decreases or aligned pricing between competing users of the software." And the company will "cooperate in the United States' lawsuit against property management companies that have used its software." Moving forward, the company will also stop training its models on "active lease data" and "cease conducting market surveys" that included a broad set of landlords who didn't even use its software "to collect competitively sensitive information." Ars could not immediately reach RealPage for comment. The company's lawyer, Stephen Weissman, told The New York Times that RealPage sees the settlement as the DOJ blessing "the legality of RealPage's prior and planned product changes." "There has been a great deal of misinformation about how RealPage's software works and the value it provides for both housing providers and renters," Weissman said. To ensure that RealPage complies with the deal, the company agreed to accept a court-appointed monitor to perform audits over the next three years. RealPage will also designate an antitrust compliance officer who will be tasked with duties such as preventing the company's "Pricing Advisors" from meeting with individual landlords in efforts to subvert compliance. States joining the US in suing RealPage were not part of the settlement agreement, the DOJ noted. RealPage's algorithm used to set prices of 24 million units In 2022, ProPublica flagged RealPage as potentially responsible for rising rents. The company had quickly become the country's "dominant provider" of rent-pricing software "after federal regulators approved a controversial merger in 2017," ProPublica noted. That report cited comments made by a RealPage vice president, Jay Parsons, at a meeting with a group of real estate tech executives. Boasting that "one of their company's signature products: software" uses "a mysterious algorithm to help landlords push the highest possible rents on tenants," Parsons wooed landlords. In a since-deleted video, he noted that apartment rents had recently increased by 14.5 percent, bragging that "never before have we seen these numbers" and prodding another executive to agree that RealPage was "driving it, quite honestly." Business Insider dubbed it landlords' "secret weapon." Back then, critics told ProPublica that "at a minimum," RealPage's "algorithm may be artificially inflating rents and stifling competition," noting that "machines quickly learn" to increase prices "above competitive levels" to "win." Today, RealPage's site notes that "its suite of services is used to manage more than 24 million units worldwide." The DOJ reported that on top of collecting its customers' sensitive information -- which included rental prices, demand, discounts, vacancy, and lease terms -- RealPage also collected data by making "over 50,000 monthly phone calls," conducting "market surveys" of landlords covering "over 11 million units and approximately 52,000 properties." Landlords "knowingly share this nonpublic information with RealPage," the DOJ said, while "rising rents have disproportionately affected low-income residents." Assistant attorney general of the DOJ's Antitrust Division, Abigail Slater, confirmed the settlement would ensure that RealPage can no longer rely on such nonpublic data to help landlords collude to set rental prices, while advancing the DOJ's mission of preventing price-fixing algorithms from harming Americans. "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," Slater said.

DoJ agrees to settle with RealPage in rent collusion software case

Last year, the Department of Justice filed an antitrust suit against software company RealPage, accusing it of manipulating the rental housing market and driving up prices. Now, the DoJ has announced a proposed settlement that would put limits on RealPage's ability to collect and use sensitive information gathered from landlords. Under the terms, though, RealPage would pay no damages and admit to no wrongdoing. Texas-based RealPage's software is said to manage over 24 million rental units globally. The DOJ's original complaint accused the company of working with landlords who agree to share "nonpublic, competitively sensitive information" about rental rates and other lease terms. RealPage then uses that data to train algorithms for its YieldStar software, which generate pricing and other recommendations "based on their and their rivals' competitively sensitive information," according to the DOJ. If approved by the court, the settlement would require RealPage to only used landlord data that's 12 months or older in its algorithm. RealPage would also need to "remove or redesign" features that discourage landlords from lowering prices or prompt them to match competitors' prices. Its software would not be allowed to offer "hyperlocalized pricing" information that can manipulate rents "block-by-block," according to the DoJ's assist attorney general, Abigail Slater. "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," Slater said in a statement. However, as the dedicated real estate site Propmodo put it, the "outcome looks much closer to a reset than a punishment," adding that the government will likely focus enforcement on tools that steer collective behavior. "Algorithms will continue to shape pricing strategies, but with clearer boundaries."

RealPage Agrees to Settle Federal Rent-Collusion Case

The Justice Department had accused the real estate software company of enabling landlords to charge tenants more than free-market rates. The Justice Department said on Monday that it had reached an agreement to settle an antitrust lawsuit against RealPage, a real estate software company that the government accused of enabling landlords to collude to raise rents. Using RealPage software, landlords shared information about their rents and occupancy rates with the company, after which an algorithm suggested what to charge renters. The government's suit, which was joined by several state attorneys general, accused RealPage of taking the confidential information and suggesting rents higher than those in a free market. Under the settlement proposal, which requires approval by a federal judge overseeing the case in the Middle District of North Carolina, RealPage's software could no longer use information about current leases to train its algorithm. Nonpublic data from competing landlords would also be excluded when suggesting rents. "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," said Gail Slater, who leads the antitrust division at the Department of Justice, in a news release. Stephen Weissman, RealPage's lawyer at the firm Gibson Dunn, said in a statement that the company denied any wrongdoing. The company appreciated the government's willingness to "bless the legality of RealPage's prior and planned product changes," he said. "There has been a great deal of misinformation about how RealPage's software works and the value it provides for both housing providers and renters." The lawsuit, one of the most prominent civil actions that placed an algorithm at the center of a price-fixing case, was filed last year as politicians increasingly focused on the rising cost of housing. Former Vice President Kamala Harris raised concerns about the use of algorithms to set rents while running for president last year. New York became the first state to ban the practice in October. The states that joined the original lawsuit were not included in Monday's settlement.

DOJ and RealPage Agree to Settle Rental Price-Fixing Case

What Happened: The Department of Justice and Texas software-maker RealPage announced Monday that they have reached a settlement in a case involving price-fixing allegations in some of the nation's largest rental markets. At issue was algorithmic rent-setting software the tech company sold that prosecutors said enabled landlords to compete less and boost prices in apartment buildings in ways that could violate antitrust laws. The proposed settlement, which must now be approved by a judge, said RealPage will stop offering software that uses nonpublic, "competitively sensitive" data shared among landlords to recommend how much to charge tenants, officials said. Under the agreement, RealPage will stop conducting market surveys to gather such information, and it agreed not to discuss pricing strategies or trends based on nonpublic data at meetings it holds for property managers, officials said. The company also must remove or redesign software features that restrict rent decreases or align pricing among competitors, they said. A court-appointed monitor will ensure compliance with the settlement, if it is accepted. The company also agreed to cooperate with prosecutors in their lawsuit against property managers that have used its software. A 2022 ProPublica investigation showed RealPage was helping landlords decide rents in a way that legal experts said could result in cartel-like behavior. The DOJ also sued six big landlords, accusing them of using algorithmic software to work together and raise rents. Some have reached settlements with prosecutors. What They Said: The Justice Department said in a statement that "the proposed settlement would help restore free market competition in rental markets for millions of American renters." "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," Assistant Attorney General Abigail Slater said. RealPage said in a statement on its website that the settlement "provides greater certainty for housing providers and technology innovators that revenue management software can be operated confidently and in compliance with the views of federal antitrust enforcers." "Through it all, our teams remained focused on serving customers and advancing the technology the industry relies on every day," said Dirk Wakeham, RealPage's president and CEO. "We are pleased to have reached this agreement with the DOJ, which brings the clarity and stability we have long sought and allows us to move forward with a continued focus on innovation and the shared goal of better outcomes for both housing providers and renters." The settlement did not include admissions of wrongdoing, RealPage said, and does not involve financial penalties. The company said there would be no disruption to its clients' operations, saying that the settlement would formalize software modifications that were "already made or planned" and that "all RealPage solutions remain fully available, compliant, and configurable to meet evolving legal requirements." Stephen Weissman, an attorney for the company, said RealPage believes its use of data has led to "lower rents, less vacancies, and more procompetitive effects." RealPage declined to comment further on the settlement. Background: The proposed settlement is the latest development following ProPublica's 2022 investigation. Dozens of tenants sued RealPage after the initial story. The Biden Justice Department filed an antitrust complaint against the company in 2024, and in January, it sued six of the nation's biggest landlords, including Greystar, accusing them of improperly working together to raise rents. Prosecutors said that one landlord told RealPage that it started increasing rents within a week of adopting the software and, within 11 months, had raised them more than 25%. The litigation, which continued under the Trump administration, was joined by at least 10 attorneys general, including the one for California, the country's most populous state -- home to roughly 17 million renters. Senators have also held hearings and introduced legislation seeking to ban the use of rent algorithms like RealPage's. And at the local level, cities around the country, including San Francisco, Philadelphia and Minneapolis, moved to bar landlords from using similar algorithms to set rents. Why It Matters: The Biden DOJ's moves against RealPage -- and its landlord customers -- for using shared data and technology were seen as an indication that authorities were willing to wade into a fraught corner of federal antitrust law. In the past, collusion happened with "a formal handshake in a clandestine meeting," federal prosecutors wrote in one filing. "Algorithms are the new frontier." Trump's DOJ continued to prosecute the case this year even as the administration retooled the department and scaled back on traditional enforcement priorities like police misconduct. The proposed agreement follows the DOJ's August announcement that it had made a deal with Greystar, the nation's largest landlord, to settle the government's claims related to its use of RealPage's algorithmic rent-setting software. Greystar does not admit wrongdoing as part of the settlement and said it accepted the deal "to make clear the government's interpretation of the law and to ensure we continue to do things the right way."

Settlement Reached That Limits Your Landlord’s Favorite Alleged Rent-Fixing Software

The Department of Justice and the real estate platform RealPage just made a deal, and since it doesn’t completely dismantle RealPage, it’s not going to be seen as a total victory for tenants who hate RealPage. But it’s something, and it will most likely weaken the platform’s power to raise rents, as it will now be prevented from shuffling together nonpublic information from competing landlords when setting prices. According to the New York Times RealPage still denies having done anything wrong, per statements from Stephen Weissman, an attorney representing RealPage. The company is glad the government was willing to "bless the legality of RealPage’s prior and planned product changes," Weissman said, “There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters.†RealPage, founded in 1998, is a multifaceted tool for landlords, not just a pricing aid. Its suite of features has been, according to press coverage and the federal charges that led to this settlement, an unseen poltergeist in renters’ lives for years, making life generally more miserable, even while most tenants had no idea it exists. For instance, according to a 2020 investigation by the New York Times and The Markup, RealPage was using flawed algorithms to perform background checks, and landlords were denying people homes based on nonexistent criminal charges. When it came to rents, RealPage itself at one point claimed that the landlords who used it faithfully were “driving every possible opportunity to increase price even in the most downward trending or unexpected conditions.†Then in August of last year, the Justice Departmentâ€"along with eight state attorney generalsâ€"slapped RealPage with an antitrust suit. The legal filing makes for immensely gratifying reading, particularly when you know RealPage settled after being hit with the following accusation: “At bottom, RealPage is an algorithmic intermediary that collects, combines, and exploits landlords’ competitively sensitive information. And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices and honest businesses that would otherwise compete.†The price recommendation systems in RealPage, called YieldStar and AI Revenue Management, worked by asking usersâ€"landlordsâ€"to enter nonpublic data on rental real estate that only landlords would generally have. That included private data from applications, rent amounts, leases renewed, units sitting unoccupied, and other numbers of this nature that can be used to quantify the state of the market in extremely granular detail. Not all of this data is part of the most recent version of RealPage’s software, but it’s how it worked historically. All this market information was heaped into a pile and combined with the data piles of other landlords, who are theoretically their competitors. The system would process all of this with an algorithm, and generate bespoke price recommendations for all landlords in an area, all using one another's data. Making its data all the more comprehensive was its 80 percent market share, according to the DOJ. That alleged monopoly status theoretically meant landlords paid higher prices for RealPage, which were passed on to renters. And it apparently made rents go up. A 2022 ProPublica investigation found widespread RealPage adoption, and widespread rent increases to go with it. In Nashville, prices had recently gone up 14.5%, and ProPublica found that landlords were thrilled. In a testimonial, a real estate revenue manager said "The beauty of YieldStar is that it pushes you to go places that you wouldn’t have gone if you weren’t using it," according to ProPublica. So instead of competing with one another to earn rents from people who need housing, the lawsuit claimed that, landlords joined forces with other landlords, and turned their competitive drives against their tenants. They didn't actually set foot in a room with one another to engage in sinister price-fixing meetings. The software allegedly took care of it all for them. If the settlement is approved by a North Carolina judge, RealPage will no longer be allowed to use information from current leases to train its algorithm, or to mix nonpublic data from different landlords together when making price recommendations. Gail Slater, the DOJ's antitrust division leader was quoted in a government news release as saying, “Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement.â€Â

RealPage settles DOJ case with data agreement

Thoma Bravo's RealPage and the justice department reached a settlement agreement in an antitrust case that had accused the company of monopolizing the market for rental property software and fostering a price-fixing conspiracy among residential landlords around the U.S. According to the proposed settlement, which has to be approved by a federal judge in North Carolina, RealPage has agreed to stop enabling the sharing of nonpublic pricing data between competing landlords and to stop using that data to train its artificial intelligence models for determining rental prices. "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," said Assistant Attorney General Abigail Slater of the justice department's antitrust division. RealPage, based in Richardson, Texas, helps residential landlords market vacant apartments, screen prospective tenants and set rents, among other functions. It serves more than 24 million units around the world, according to the company's website, making it one of the largest software providers to the multifamily industry. In a statement, RealPage said the settlement, which doesn't require the company to admit wrongdoing, will allow it to continue without customer disruptions. "This resolution with the DOJ was necessary to provide certainty and finality for RealPage and its customers to avoid protracted litigation," said Stephen Weissman, an outside lawyer for the company. A group of state attorneys general who sued alongside the justice department last summer didn't sign on to the settlement, meaning that those lawsuits are continuing. The lawsuit was filed toward the end of the Biden administration and represented the first big collusion case based on an algorithm. Justice department officials over the last several administrations have discussed the potential for companies to collude electronically, a fear that has been supercharged by the use of artificial intelligence. In January, the justice department added a number of major landlords, including Greystar Real Estate Partners, to the lawsuit. Greystar agreed to settle in August, saying it would stop using algorithmic pricing software that relies on nonpublic data and would cooperate with the justice department's case against RealPage. A group of other landlords remain defendants in the case.

Exclusive | DOJ settles case accusing real estate tech firm RealPage of enabling...

The Justice Department has settled its case against real estate tech firm RealPage, which faced bombshell allegations of building algorithms that allowed landlords to illegally collude to jack up rents for tenants, The Post has learned. The settlement, disclosed in North Carolina federal court on Monday, requires RealPage to stop allowing its software to use "nonpublic, competitively sensitive information" provided by landlords to set rent prices. RealPage will also be forced to stop using active lease data to train its algorithmic models and only use information that is at least 12 months old. The DOJ said the settlement would "help restore free market competition in rental markets for millions of American renters." "Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," DOJ antitrust chief Gail Slater said in a statement. The settlement agreement requires court approval before it can be implemented. The deal came during a broad push by President Trump and his administration to bring down housing costs, which have been weighing on the pockets of ordinary Americans. With the settlement, the DOJ secured remedies while avoiding a trial that was likely years away. Filed last year under then-US Attorney General Merrick Garland, the DOJ's lawsuit alleged that RealPage's software has enabled shady landlords to prioritize profits over filling up their building, which has allegedly placed further strain on the housing supply and crushed cash-strapped renters with soaring costs. Rather than competing with each other to attract tenants as they normally would, landlords were instead allowing algorithms to set prices based on nonpublic rent data that they and their rivals submitted to RealPage, the suit alleged. Under the terms of the settlement, RealPage has agreed not to allow its models to assess geographic market effects at lower than the state level, and to remove or redesign any features that limited rent price decreases or otherwise caused rival landlords on its platform to align their prices. The Richardson, Tex.-based company will also stop soliciting sensitive information about the rental market through market surveys, cease discussing market trends based on nonpublic information in meetings about its revenue management software, and accept a court-appointed monitor to ensure it is in compliance with the settlement. The DOJ initially filed the lawsuit alongside eight states: California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington state. The feds also accused RealPage of operating an illegal monopoly for property management software for multi-family housing. In January, the lawsuit was amended to add six of the country's biggest landlords as co-defendants: Greystar Real Estate Partners, Blackstone's LivCor, Camden Property Trust, Cushman & Wakefield, Willow Bridge and Cortland. Two more states, Illinois and Massachusetts, joined as plaintiffs. The DOJ previously reached settlement agreements with Cortland and Greystar, while proceedings against the other defendants are still pending. As part of its settlement, RealPage agreed to cooperate with the DOJ in the lawsuit against the remaining landlord defendants. The Post has sought comment from RealPage. The case marked the first time that DOJ antitrust enforcers went after so-called algorithmic collusion, a growing concern as more industries become reliant on software to run their businesses. "RealPage has built a business out of frustrating the natural forces of competition," the lawsuit stated. The suit cited comments from RealPage executives that allegedly showed they were aware the software was affecting normal competition in the rental market. "There is greater good in everybody succeeding versus essentially trying to compete against one another in a way that actually keeps the entire industry down," one executive said, according to the DOJ.