this Ministry of Justice The (Department of Justice) continues to target the real estate industry for alleged violations of antitrust laws.
The U.S. Department of Justice targets real page On Friday, claims that the company’s YieldStar and AI Revenue Management (AIRM) software allow multifamily landlords to artificially inflate rents by sharing private information. This information is provided through the platform’s algorithm to make rental price recommendations.
“The software provides landlords with daily pricing recommendations, taking the guesswork out of understanding the behavior of competing landlords,” Benjamin Mizer, acting deputy attorney general at the U.S. Department of Justice, said in a statement. “So , landlords can adjust rent prices while tenants are limited in their ability to successfully negotiate counteroffers or seek discounts. This behavior is extremely egregious.
The complaint alleges that landlords using YieldStar agree to provide “competitively sensitive information” that RealPage does not make available to the public. This information is used to suggest price floors for landlords and their competitors, thereby depriving the market of independent decision-making. The DOJ claims this allows landlords to adjust pricing to “move up the tide” for people using YieldStar and AIRM.
Additionally, the DOJ accuses RealPage of trying to monopolize the business revenue management software market through exclusionary practices that have “self-reinforcing data and scale advantages.”
During a conference call about the case on Friday, the Justice Department highlighted the portion of the complaint involving reference communications in which RealPage executives said their product helped identify instances of rent increases. The DOJ also claims that RealPage’s best practices can help landlords eliminate offers such as a free month of rent or access to amenities.
economic policy organization basic cooperation He praised the action as “a good day for renters and families, and a bad day for predatory landlords.”
“The Department of Justice is doing the right thing by responding to the affordability crisis exacerbated by RealPage,” Groundwork executive director Lindsay Owens said in a statement. “Algorithms are being used to unfairly drive up the price of housing, meat, and more. This Price manipulation must stop.
A Justice Department official said more landlord defendants may be added to the indictments in the future. Several states, including North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington, are also named as plaintiffs in the lawsuit.
The DOJ lawsuit is just the latest in a series of antitrust lawsuits filed against RealPage. according to the real dealthere are at least 7 class-action lawsuits filed against the company in 2022, filed by Puplica.
In 2023, a group of renters filed a lawsuit in Tennessee accusing RealPage of organizing a “cartel” of the country’s largest landlords.
The RealPage lawsuit comes after the Justice Department has been involved in antitrust litigation against the real estate industry for years, most notably a class action lawsuit against the real estate industry. national association of realtorsbrokerage firms and multiple listing services have accused it of anti-competitive conduct related to buyer-broker compensation offers negotiated on the MLS.
In March, NAR reached a $418 million settlement with plaintiffs in multiple antitrust class-action lawsuits, sending shockwaves throughout the industry as the industry attempts to implement and adjust new rules agreed to in the settlements.
