Yardi Systems, another U.S. property management company, is also facing a class-action lawsuit alleging antitrust violations for artificially inflating rents. The company has said it has done “nothing illegal” as it does not mandate rents through its software or make “collusive pricing decisions.”
According to Zillow, typical rental costs in Phoenix increased by more than $500 per month between April 2020 and 2024, and in Washington D.C. by about $400 over the same period.
Tenants have also filed numerous class-action lawsuits against RealPage and the landlords who joined the group. Some landlords were named in those settled claims earlier this year. The court dismissed a lawsuit alleging student housing price-fixing but said the tenants’ class action can proceed. Attorneys representing some of the plaintiffs in the class action did not respond to requests for comment.
RealPage laid off about 4 percent of its workforce in June. “RealPage is hyper-focused on innovation and accelerating our business growth in 2024 and beyond, and as a result, has decided to eliminate a small number of roles within the company,” said Jennifer Bowcock, a company spokesperson. The layoffs were not related to the antitrust lawsuit, she said. Thoma Bravo, RealPage’s owner, did not respond to a request for comment for this story.
RealPage said in 2020 it collected data on about 16 million rental properties in the U.S. There are 44 million renter households in the U.S., and nearly 22 million rental properties are owned by for-profit companies. RealPage grew when it acquired Lease Rent Options (LRO) in 2017, after it cleared antitrust scrutiny from the Justice Department. The Justice Department did not comment on WIRED’s inquiries about the reported investigation into RealPage or its approval of RealPage’s acquisition of Lease Rent Options in 2017.
When asked about the latest status of the investigation, RealPage referred to a portion of its recent lengthy statement, which said: “The Department of Justice conducted an extensive investigation of LRO and YieldStar in 2017 without objecting to, let alone criticizing, any feature of the products.” RealPage also says that its “products are fundamentally the same today” as they were when the acquisition was approved.
In June, The New York Times asked Assistant Attorney General Jonathan Kanter, the Justice Department's top antitrust official, whether he would consider an AI tool that communicates price information to be the same as human collusion, with the question referencing the reported RealPage investigation. Kanter responded, “I often say that if your dog bites someone, you're responsible for your dog biting someone. If your AI sets prices, you're just as responsible.”
The Justice Department also filed a declaration of interest in RealPage’s combined class action lawsuit last year, saying the case could set a precedent in algorithmic pricing. The declaration echoed Kanter’s argument that the method of pricing doesn’t matter and that algorithms are merely the latest evolution in information gathering and sharing.
“Personal handshakes gave way to telephone and fax, and then email. Algorithms are the new frontier,” the Justice Department argued in a statement of interest filed in the class action lawsuit against RealPage and landlords. “And given the amount of information an algorithm can access and process, this new frontier poses an even greater anticompetitive threat than the last.”
