Editor’s Note: The Justice Department lawsuit against RealPage Inc. spotlights the growing importance of monitoring and regulating algorithmic practices that have far-reaching consequences on market competition. For those in the fields of information governance and cybersecurity, this case illustrates the legal and ethical challenges posed by using AI and big data in sensitive sectors such as housing. Understanding the implications of this lawsuit can provide valuable insights into how similar technologies might be scrutinized or litigated in the future.


Content Assessment: Antitrust Lawsuit Against RealPage Raises Concerns Over AI-Driven Collusion

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Industry News – Antitrust Beat

Antitrust Lawsuit Against RealPage Raises Concerns Over AI-Driven Collusion

ComplexDiscovery Staff

The U.S. Department of Justice (DOJ) and Attorneys General from eight states have initiated a civil antitrust lawsuit against RealPage Inc., accusing the company of engaging in an unlawful scheme to manipulate rental pricing across the United States. Filed in the U.S. District Court for the Middle District of North Carolina, the lawsuit alleges that RealPage violated Sections 1 and 2 of the Sherman Act by using its algorithmic pricing software to facilitate collusion among landlords, thereby inflating rents and restricting competition.

Allegations of Data-Driven Collusion

RealPage, a property management software firm based in Richardson, Texas, is accused of creating and maintaining an environment where landlords could coordinate rental pricing through shared data. According to the DOJ’s complaint, RealPage’s software collects nonpublic, competitively sensitive information from participating landlords. This information, which includes rental rates and lease terms, is then processed by RealPage’s algorithm to generate pricing recommendations that reflect the combined data of the participating entities.

The DOJ contends that this practice undermines competition by enabling landlords to avoid independent pricing strategies. In a free market, landlords typically compete on price, discounts, and other lease conditions to attract renters. By contrast, RealPage’s software allegedly encourages landlords to align their pricing, thereby inflating rents across markets to the detriment of renters.

The Legal Perspective

The DOJ’s action against RealPage is positioned as a critical step in enforcing antitrust laws in the context of modern, data-driven business practices. Attorney General Merrick B. Garland emphasized the seriousness of the allegations, stating, “Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law.” He further noted that while technology may evolve, the principles of fair competition must remain intact, and the use of software does not exempt companies from legal scrutiny.

Deputy Attorney General Lisa Monaco echoed this sentiment, highlighting the DOJ’s commitment to targeting the most egregious violations of antitrust law. “By feeding sensitive data into a sophisticated algorithm powered by artificial intelligence, RealPage has found a modern way to violate a century-old law through systematic coordination of rental housing prices,” Monaco said. She added that the DOJ would continue to use all available legal tools to address such technology-driven anticompetitive conduct.

Monopoly Concerns in Software Markets

In addition to allegations of collusion, the DOJ’s complaint also targets RealPage’s dominant position in the United States market for commercial revenue management software for multi-family dwellings. RealPage reportedly controls approximately 80% of this market, a level of dominance that the DOJ argues is both self-reinforcing and harmful to competition.

The complaint asserts that RealPage’s market power is sustained through the very data-sharing agreements that facilitate its alleged collusion. By centralizing sensitive data and using it to influence rental pricing, RealPage is accused of creating a feedback loop that strengthens its market position while making it more difficult for competitors to offer alternative solutions.

Implications for Business and Legal Professionals

For business and legal professionals, this lawsuit is a reminder of the increasing scrutiny on the intersection of technology, data, and competition law. The case against RealPage underscores the potential antitrust risks associated with algorithmic pricing tools and other AI-driven technologies, particularly when they involve aggregating and using competitively sensitive data.

Acting Associate Attorney General Benjamin C. Mizer emphasized the broader implications of the case, stating, “RealPage’s egregious, anti-competitive conduct allows landlords to undermine fair pricing and limit housing options while stifling necessary competition.” The DOJ’s pursuit of this case suggests that regulators are increasingly attuned to the ways in which technology can be used to circumvent traditional antitrust principles.

Assistant Attorney General Jonathan Kanter, head of the DOJ’s Antitrust Division, also pointed to the broader social impact of RealPage’s alleged conduct, particularly in the context of rising housing costs. “As Americans struggle to afford housing, RealPage is making it easier for landlords to coordinate to increase rents,” Kanter said. He underscored the importance of competition in ensuring affordability, suggesting that this case could have far-reaching consequences for both the rental market and the software industry.

Looking Ahead

The outcome of this lawsuit could set significant precedents for how antitrust laws are applied to technology companies, particularly those operating in markets where data aggregation and algorithmic decision-making are central to business models. If the DOJ’s case is successful, it could lead to stricter regulations on the use of AI and data-driven tools in competitive markets, as well as potential changes in how companies are allowed to share and utilize sensitive business information.

RealPage has not yet issued a public response to the lawsuit. However, legal professionals and the broader business community will closely watch the legal battle that unfolds, as it may redefine the boundaries of permissible conduct in the digital age.

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