The Department of Justice and eight states’ attorney generals filed an antitrust lawsuit against rental software company RealPage on Friday, accusing it of using algorithms to drive up rent prices nationwide. The suit alleges RealPage’s software, YieldStar, gathers sensitive information from landlords and rental companies, which it feeds into algorithms that recommend prices and practices that limit competition and force renters to pay more.
The DOJ was joined in its suit by the attorney generals of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. It filed the lawsuit in the US District Court for the Middle District of North Carolina, accusing the company of violating Sections 1 and 2 of the Sherman Act. The 1890 law is considered the bedrock of US antitrust actions.
The DOJ’s complaint cites internal documents and sworn testimony from the company, along with landlords who have used the software to allegedly price-gouge renters. The agency says RealPage admitted its software was designed to maximize rent prices, saying its product excels at “driving every possible opportunity to increase price,” “avoid the race to the bottom in down markets” and “a rising tide raises all ships.