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This Legal Battle Could Reshape Rental Markets and Tech Standards

RealPage under fire for antitrust violations and orchestrating collusion among landlords

August 23, 2024

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It’s here — a lawsuit that could fundamentally reshape the way rental prices are set and challenge the technological status quo in real estate.

The U.S. Department of Justice, supported by eight state attorneys general, has launched a significant antitrust lawsuit against RealPage, Inc., spotlighting the company’s use of algorithms that may have artificially inflated rents nationwide — leading to some of the sticky inflation that’s plaguing consumers everywhere.

This case could signal a pivotal shift in the landscape of technology and housing affordability.

The Big Picture:

At the heart of the lawsuit is the allegation that RealPage's software, YieldStar, has enabled a form of algorithmic collusion among landlords, undermining competitive rent pricing and contributing to the soaring cost of living in many communities.

This legal action comes amid a broader crackdown on anticompetitive practices in tech, with recent successful actions against giants like Google and Apple, with more in the wings, showcasing a rejuvenated regulatory environment.

Why It Matters:

This isn’t just about one company’s software; it’s about setting a precedent for the future of competitive practices in the digital age.

With housing affordability at a crisis point—where many are just a paycheck away from eviction—the implications of this case stretch far into the fabric of society.

But the DOJ and FTC appear to be regaining their enforcement mojo, challenging major corporations that influence basic living costs through sophisticated tech underpinnings.

By the Numbers:

  • 80% Market Share: RealPage’s dominance in the revenue management software market.

  • Millions of Renters Affected: Properties using RealPage’s software impact rents for a vast segment of the population.

  • 3% to 7% Rent Increase: RealPage’s own claims about how much its software can increase landlords’ revenue.

Digging Deeper:

Beyond the sheer scale of its market influence, RealPage’s approach to pricing has raised serious ethical and legal questions.

Internal communications and expert analyses suggest a concerted strategy to use data not just to suggest prices but to control market dynamics—potentially at the expense of millions of renters who find themselves squeezed by escalating costs.

“RealPage frequently tells prospective and current clients that a ‘rising tide raises all ships,’” a phrase emblematic of the alleged collusion to lift rental prices industry-wide rather than compete in a way that might benefit tenants.

What’s Next:

As this lawsuit unfolds, it could catalyze a significant re-evaluation of how antitrust laws apply to algorithm-driven business practices.

The outcome may influence how software companies develop and market their products. But more importantly, it may spur legislative and regulatory reforms aimed at protecting consumers from similar abuses both in housing and across other sectors.

The Bottom Line:

The case against RealPage is a crucial test of our legal system’s ability to contend with modern antitrust challenges — to hold someone accountable for the skyrocketing cost of living that’s making so many lives miserable.

It also reflects a broader societal question: how do we balance technological innovation with the need for fair market practices?

As millions struggle with affordability, the urgency for effective oversight has never been clearer. Will this legal action prompt a broader regulatory overhaul, or will it serve as a wakeup call for the tech industry to prioritize ethics as much as innovation?

For-profit corporations are good at one thing and one thing only: making money. Prioritizing ethics? The wellbeing of the commonwealth? Of everyday people? Come on. Please, there’s no use trying to fool ourselves into thinking they’d take the altruistic route.

And this suit puts that on full display: when given the opportunity to 1) provide reasonably and competitively priced housing or 2) squeeze an extra buck out of an already struggling young family, they choose latter wholeheartedly.

The ramifications of this case will likely ripple across the tech and housing landscapes, potentially reshaping how companies leverage data in the competitive arena and how landlords determine how to price rentals.

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