The recent antitrust charges brought forth by US prosecutors against RealPage, a property management software company, shed light on the alleged collusion among landlords facilitated by algorithms. The Department of Justice, along with eight US states, filed a civil lawsuit accusing RealPage of monopolizing the commercial revenue management software sector. The lawsuit claims that RealPage’s algorithmic software allows competing landlords to share real-time pricing inputs and sensitive data, ultimately resulting in inflated prices and harming consumers.
The lawsuit marks a significant shift in how antitrust violations are being addressed, as it specifically targets the use of computer algorithms for anticompetitive behavior. By using algorithms to generate pricing recommendations, RealPage is accused of engaging in classic price-fixing practices, thereby eliminating the competitive landscape among landlords. This move by US prosecutors highlights the importance of maintaining healthy competition to protect consumers from unfair practices.
RealPage has vehemently denied the allegations, stating that the lawsuit is unfounded and serves as a distraction from the underlying issues impacting rental inflation. The company argues that factors such as housing supply constraints and high mortgage rates are the primary drivers of rising rents, shifting the blame away from their algorithmic software. RealPage contends that their technology has been used responsibly for years and is not the cause of housing affordability concerns.
Assistant Attorney General Jonathan Kanter emphasized the role of data science experts in uncovering how technology, particularly algorithms, can be exploited for anticompetitive purposes. The rapid processing capabilities of algorithms can tip the market in favor of monopolies, undermining the competitive process and harming consumers. The lawsuit against RealPage underscores the need for greater scrutiny of tech-driven practices that have the potential to distort market dynamics.
RealPage’s extensive presence in the rental market, particularly in regions like the US Sunbelt and the South, raises concerns about the company’s influence on pricing and competition. With a significant market share in cities like Raleigh, North Carolina, RealPage’s dominance could stifle competition and limit consumer choice. The allegations against RealPage highlight the broader implications of algorithmic collusion on rental markets across the US.
The antitrust charges against RealPage expose the risks associated with the unchecked use of algorithms in the property management sector. By targeting alleged collusion among landlords facilitated by algorithmic software, US prosecutors are signaling a shift towards more rigorous scrutiny of tech-driven antitrust violations. The outcome of this lawsuit could have far-reaching implications for how technology is regulated in the real estate industry and beyond.
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