“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,” Lawyer Basic Merrick Garland stated on Friday.
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RealPage is now throughout the sights of the U.S. Division of Justice.
The DOJ and eight state attorneys common filed a lawsuit on Friday accusing RealPage of working as the middle of an unlawful scheme to drive up the value of lease in cities throughout the nation.
The brand new lawsuit, filed within the U.S. District Court docket for the Center District of North Carolina is barely the newest problem in opposition to an organization that makes use of superior know-how and cooperation from a number of the nation’s largest landlords to regulate lease costs in close to real-time, nevertheless it’s the primary main antitrust go well with to take direct goal at an algorithm, in line with The New York Occasions.
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“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,” Lawyer Basic Merrick Garland stated in an announcement Friday. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents. Using software as the sharing mechanism does not immunize this scheme from Sherman Act liability, and the Justice Department will continue to aggressively enforce the antitrust laws and protect the American people from those who violate them.”
RealPage, which is owned by the non-public fairness agency Thoma Bravo, has denied wrongdoing in earlier lawsuits filed by renters and in Washington D.C., and once more in an announcement to Inman on Friday.
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” RealPage spokeswoman Jennifer Bowcock stated in an announcement. “It is merely a distraction from the fundamental economic and political issues driving inflation throughout our economy – and housing affordability in particular – which should be the focus of policymakers in Washington, D.C.”
Bowcock famous that the DOJ had beforehand reviewed RealPage’s acquisition of considered one of its corporations in 2017 and cleared the transaction of antitrust issues.
“We believe the claims brought by DOJ are devoid of merit and will do nothing to make housing more affordable,” Bowcock stated. “We intend to vigorously defend ourselves against these accusations.”
In some methods, the lawsuit is well timed. RealPage bought its software program to landlords as a solution to beat down markets, feeding them knowledge to assist them set the very best doable lease regardless of potential urges to drop the value to fill models.
The nation is now on its method out of a interval the place residence building was the very best its been in 4 a long time. That has pushed up emptiness charges in some markets, testing landlords’ capability to compete with different landlords additionally making an attempt to fill new and vacant buildings.
“A free market requires that landlords compete on the merits, not coordinate pricing,” the criticism reads. “Landlords should win renters by offering whatever combination of price and quality they think is most attractive.”
The DOJ and attorneys common are looking for an injunction to cease RealPage from implementing its information-sharing framework and to cease what they stated was the corporate’s monopoly.
Utilizing a few of RealPage’s personal advertising language to stipulate the agency’s pitch to a few of America’s greatest landlords, the DOJ stated RealPage had created a solution to keep away from competing with one another.
“Renters are entitled to the benefits of vigorous competition among landlords. In prosperous times, that competition should limit rent hikes; in harder times, competition should bring down rent, making housing more affordable,” the criticism reads. “RealPage has built a business out of frustrating the natural forces of competition.”
“RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price.”
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