The emblem for the Justice Department is seen earlier than a information convention on the Department of Justice on Aug. 23, 2024, in Washington.
Mark Schiefelbein/AP
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Mark Schiefelbein/AP
Landlords may not depend on rent-pricing software program to quietly monitor one another’s strikes and push rents larger utilizing confidential knowledge, below a settlement between RealPage Inc. and federal prosecutors to finish what critics stated was unlawful “algorithmic collusion.”
The deal introduced Monday by the Department of Justice follows a yearlong federal antitrust lawsuit, launched through the Biden administration, in opposition to the Texas-based software program firm. RealPage wouldn’t should pay any damages or admit any wrongdoing. The settlement should nonetheless be authorized by a choose.
RealPage software program supplies each day suggestions to assist landlords and their workers nationwide worth their obtainable residences. The landlords don’t have to observe the options, however critics argue that as a result of the software program has entry to an enormous trove of confidential knowledge, it helps RealPage’s purchasers cost the best potential lease.
“RealPage was changing competitors with coordination, and renters paid the value,” stated DOJ antitrust chief Gail Slater, who emphasised that the settlement prevented a expensive, time-consuming trial.
Under the phrases of the proposed settlement, RealPage can not use that real-time knowledge to find out worth suggestions. Instead, the one nonpublic knowledge that can be utilized to coach the software program’s algorithm should be no less than one 12 months previous.
“What does this imply for you and your loved ones?” Slater stated in a video assertion. “It means extra actual competitors in native housing markets. It means rents set by the market, not by a secret algorithm.”
RealPage legal professional Stephen Weissman stated the corporate is happy the DOJ labored with them to settle the matter.
“There has been an excessive amount of misinformation about how RealPage’s software program works and the worth it supplies for each housing suppliers and renters,” Weissman stated in a press release. “We consider that RealPage’s historic use of aggregated and anonymized nonpublic knowledge, which embody rents which can be sometimes decrease than marketed rents, has led to decrease rents, much less vacancies, and extra procompetitive results.”
Over the previous few months, greater than two dozen property administration firms have reached numerous settlements over their use of RealPage, together with Greystar, the nation’s largest landlord, which agreed to pay $50 million to settle a category motion lawsuit, and $7 million to settle a separate lawsuit filed by 9 states.
The governors of California and New York signed legal guidelines final month to crack down on rent-setting software program, and a rising listing of cities, together with Philadelphia and Seattle, have handed ordinances in opposition to the apply.
Ten states — California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington — had joined the DOJ’s antitrust lawsuit. Those states weren’t a part of Monday’s settlement.
