US Goverment Investigating Real-Estate Tech Company Accused of Helping Landlords Collude

The anti-trust division of America's Department of Justice "has reportedly opened up an investigation into RealPage, the real estate technology company accused of contributing to higher-than-normal rent prices," reports the Verge.

ProPublica writes that the investigation explores "whether rent-setting software made by a Texas-based real estate tech company is facilitating collusion among landlords, according to a source with knowledge of the matter." *The inquiry is being launched as questions have arisen about a 2017 merger between RealPage and its largest pricing competitor.... Congressional leaders have pushed for an investigation into RealPage in three letters to the DOJ and the Federal Trade Commission, which were sent after a ProPublica report on the software's use in mid-October.

RealPage's pricing software could be in violation of federal antitrust laws if it pushes rents above competitive levels. "We are concerned that the use of this rate setting software essentially amounts to a cartel to artificially inflate rental rates in multi-dwelling buildings," three senators wrote in a letter in early November. The Minnesota Democrat is the chair of the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights.

In addition to the letters from congressional lawmakers, renters have filed three lawsuits in federal court in Seattle and San Diego, accusing RealPage and a bunch of large landlords of engaging in anticompetitive behavior through the company's software.

They note Capital Forum's report with additional details — but the Verge nicely summarizes the issue: ProPublica's report states that the algorithm's design has "raised questions among real estate and legal experts about whether RealPage has birthed a new kind of cartel that allows the nation's largest landlords to indirectly coordinate pricing, potentially in violation of federal law." These experts have also raised concerns with the RealPage user group, an online forum that lets apartment managers who use the service communicate — and potentially coordinate — with one another.