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RealPage Legal Counsel Refutes DOJ Accusations of Collusion in Rental Market

By  |  August 27, 2024
RealPage Legal Counsel Refutes DOJ Accusations of Collusion in Rental Market

RealPage, a software company recently sued by the U.S. Department of Justice (DOJ), defended its practices against accusations of collusion on Monday, arguing that it operates within legal bounds and does not harm competition. The DOJ, alongside attorneys general from eight states, filed a lawsuit last Friday in a North Carolina federal court, accusing RealPage of facilitating rent increases by helping landlords share sensitive information.

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    According to USA Today, Stephen Weissman, an outside attorney representing RealPage, responded to the lawsuit by dismissing claims that the company’s practices are anticompetitive. Weissman argued that the DOJ had misrepresented the situation by “cherry-picking” quotes from company executives, taking them out of context to support their case. He emphasized that RealPage’s software aggregates rental data from various sources rather than providing specific rates from competing properties, which he believes ensures the legality of their operations.

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    Read more: RealPage Antitrust Suit Could Be Legal Test For AI-Driven Collusion

    Per USA Today, the lawsuit alleges that RealPage’s software, used by landlords managing approximately 16 million rental units across the U.S., particularly in the Sun Belt and South, has enabled landlords to share non-public information about rents, vacancies, and concessions. The DOJ argues that this information sharing suppresses competition and leads to higher rents for tenants. The suit further claims that RealPage controls about 80% of the market for “revenue management software” for landlords, giving it a monopolistic hold that it allegedly uses to assist landlords in collusion to keep rental prices elevated.

    Weissman, who once served as deputy director of the Federal Trade Commission’s Bureau of Competition, contended that the software does not inflate prices beyond what would occur in a competitive market. He asserted that the rents landlords ultimately charge are always equal to or less than the advertised rates, meaning the software does not drive rent increases.

    The DOJ’s lawsuit, according to Weissman, is complex and may lead to prolonged litigation. However, RealPage has expressed a willingness to engage in discussions with the government to address its concerns more quickly. “We want to comply with the law,” Weissman stated. “We believe strongly in the legality of our product, but if there are solutions here that allow us to continue innovating and competing in the market, we’re open to those solutions.”

    The states involved in the lawsuit against RealPage include California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington. Attorney General Merrick Garland emphasized the importance of the case, 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.”

    Source: USA Today