Recent antitrust charges against RealPage, a property management software company based in Texas, have raised concerns about the use of algorithms in enabling collusion among landlords. The Department of Justice, along with eight US states, filed a civil lawsuit alleging that RealPage has a monopoly over commercial revenue management software. This lawsuit represents a significant step in targeting anticompetitive behavior centered around computer algorithms.
The lawsuit accuses RealPage of utilizing algorithmic software to facilitate collusion among landlords by providing pricing recommendations that allow them to charge higher rents. By analyzing real-time pricing inputs and confidential data from competing landlords, RealPage’s software allegedly creates an environment where consumers are harmed. This marks the first time that US prosecutors have specifically targeted anticompetitive behavior driven by algorithms.
RealPage has vehemently denied the allegations, describing the lawsuit as groundless and a distraction from fundamental issues such as housing supply and mortgage rates. The company believes that the claims brought by the DOJ lack merit and will not contribute to making housing more affordable. RealPage maintains that its technology has been used responsibly for years and aims to drive competition within the market.
Assistant Attorney General Jonathan Kanter highlighted the role of data science experts in scrutinizing how technology, like algorithms, can be used to manipulate markets. By processing information rapidly, algorithms can tip the market in favor of monopolies and hinder the competitive process. In this case, the allegations against RealPage suggest that renters have been negatively impacted by the company’s practices.
RealPage serves companies that collectively manage three million housing units, with a significant presence in the US Sunbelt and Southern regions. In markets like Raleigh, North Carolina, RealPage reportedly accounts for up to 40 percent of the rental market share. This level of penetration raises concerns about the company’s influence and potential impact on competition within the industry.
The antitrust charges against RealPage shed light on the evolving landscape of competition in the digital age. As technology continues to play a significant role in various sectors, it is essential for regulators to closely monitor how algorithms and software are used. The outcome of this lawsuit will not only determine the future of RealPage but also set a precedent for addressing anticompetitive behavior driven by technological innovations.
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