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The U.S. Department of Justice (DOJ) filed suit against RealPage on Friday. 2 years The Justice Department launched an investigation that included unannounced FBI raids on corporate landlords across the country, alleging that Richardson, Texas-based RealPage, which sells real estate software, stifled competition among landlords and artificially inflated rents for millions of tenants across the country.
“We allege that RealPage’s pricing algorithm allows landlords to share confidential and competitively sensitive information in order to match rents,” said Attorney General Merrick B. Garland. press release.
The Department of Justice 115 page complaint On Friday in U.S. District Court for the Middle District of North Carolina, the lawsuit accused RealPage of entering into contracts with competing landlords to collect highly sensitive and detailed information, including rents, rental terms, amenities and occupancy rates.
RealPage then allegedly fed that information into its AI-driven algorithms, which recommended to landlords how to price rents and set the terms of their leases. The Department of Justice also accused the company of sending pricing advisors to landlords for “accountability conversations” and encouraging them to accept the recommendations by adding an “auto-approval” feature that automatically approved price increases.
2020, RealPage said The company’s software collects data on 16 million rental properties out of the 22 million investment-grade apartments in the United States, giving an idea of ​​its reach.
U.S. Attorney General Merrick Garland (center), Deputy Attorney General Lisa Monaco (left), and Acting Assistant Attorney General Benjamin Mizer (right). Photo by Anna Moneymaker/Getty Images
“RealPage is making it easier for landlords to adjust rent increases at a time when Americans are struggling to afford housing,” said Assistant Attorney General Jonathan Cantor of the Justice Department’s Antitrust Division, adding that “competition, not RealPage, should determine how much Americans pay in rent.”
The Justice Department filed suit against the attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. Arizona and Washington DCI have Legal action has already been taken This year we will be competing against RealPage.
Related: State attorney general sues RealPage and landlords for ‘astronomical’ rent hikes: ‘This was not a fair market’
in statementRealPage said the Justice Department’s claims are “baseless” and will do nothing to lower home prices. The company argued that the lawsuit “attempts to scapegoat pro-competitive technology.”
The American Economic Freedom Project (AELP), a non-partisan, non-profit organization, took a different stance. EntrepreneurLee Hepner, senior legal counsel at AELP, pointed to RealPage marketing: The Department of Justice emphasizedThe company said it had taken “every possible opportunity” to raise prices.
“Workers have a hard enough time affording everyday necessities without RealPage bragging about how it’s raising rents at ‘every opportunity,'” Hepner said.
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