Tennessee Attorney General Jonathan Skrmetti on Friday joined seven other states and the U.S. Department of Justice (DOJ) in an antitrust lawsuit accusing the property management software company RealPage of using its service to algorithmically fix rental prices across the United States, allowing them to form a monopoly that allows rental owners to collaboratively set prices in a bid to avoid market pressures to lower rent.
The DOJ confirmed the legal action on Friday, alleging RealPage is engaged in an “unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.”
According to the complaint, RealPage software incentivizes property owners to use its service by using algorithms to avoid decreases to rental prices and avoid inflated costs, with the company effectively creating a national cartel for rental prices using its software.
The federal complaint specifically notes a RealPage vice president described the company’s software as advantageous to property owners because, “there is greater good in everybody succeeding versus essentially trying to compete against one another.”
Prosecutors allege, “RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price.”
Skrmetti said in a statement that his office began investigating RealPage last year after it received reports of artificially high rental prices in Tennessee at properties using the company’s software.
“My office has been looking at RealPage since 2023 following concerns about the company’s efforts to keep rents artificially high in cities across Tennessee,” said Skrmetti. “We’re glad to be part of this bipartisan effort to protect consumers and hold RealPage accountable.”
My office has been looking at RealPage since 2023 following concerns about the company's efforts to keep rents artificially high across TN.
We're glad to be part of this bipartisan effort to protect consumers and hold RealPage accountable.
➡️https://t.co/yCt8hKlc47 pic.twitter.com/oihV36tVmS
— TN Attorney General (@AGTennessee) August 23, 2024
North Carolina, California, Colorado, Connecticut, Minnesota, Oregon and Washington are also involved in the litigation in addition to the DOJ and Tennessee.
The RealPage Public Policy account on the social media platform X accused the federal government of using the company as a “scapegoat” and said it was “disappointed” by the decision, citing “multiple years of education and cooperation on the antitrust matters concerning RealPage.”
It further claimed the company’s “revenue management software is purposely built to be legally compliant,” and asserted “a long history of working constructively with the DOJ to show that.”
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Tom Pappert is the lead reporter for The Tennessee Star, and also reports for The Pennsylvania Daily Star and The Arizona Sun Times. Follow Tom on X/Twitter. Email tips to [email protected].
