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DOJ Backs Lawsuits Against RealPage Over Rent Overcharging Allegations

 |  November 16, 2023

The US Justice Department has thrown its support behind private lawsuits accusing technology company RealPage of conspiring with property managers and owners to overcharge rent for student and multifamily housing.

According to Reuters, the Biden administration made its stance clear in a “statement of interest” filed in a federal court in Nashville on Wednesday, urging the judge to reject motions by RealPage and several corporate landlords seeking to dismiss the cases.

Although not a party in the litigation, the Justice Department expressed its intention to participate in the upcoming Dec. 11 hearing where RealPage and other defendants will seek to have the renters’ lawsuits dismissed. The cases, consolidated in April as part of multidistrict litigation, allege that RealPage, along with property managers and owners, engaged in a conspiracy to inflate rental prices through the use of non-public information and algorithms.

RealPage and the other defendants have consistently denied any wrongdoing, with the former describing the alleged conspiracy as “implausible.” The class-action lawsuits, filed on behalf of students and other renters, assert that landlords shared confidential information, including vacancy data, with RealPage. The company allegedly utilized this data in conjunction with its algorithms to maintain rental prices above competitive levels.

Related: Democrats Call For DOJ To Look Into Thoma Bravo Rental Software Unit

The US government’s filing in Nashville referred to algorithms as “the new frontier” of price-fixing and argued that the use of shared data and software must be held to the same standards as other forms of price-fixing schemes. The statement emphasized the applicability of longstanding legal principles to this evolving landscape.

In its filing, the Justice Department stated, “Longstanding legal principles apply with equal force to this new machinery.” The government’s involvement underscores the gravity of the allegations and signals a commitment to ensuring fair practices in the housing market, particularly as technology continues to play a crucial role in determining rental prices.

RealPage, a Texas-based technology company, has yet to respond to the recent developments, per Reuters. As the defense motions to dismiss remain pending before Chief U.S. District Judge Waverly Crenshaw Jr., the outcome of the December 11 hearing will be closely watched by stakeholders in the ongoing legal battle.

Source: Reuters