Landlords could no longer rely on rent-pricing software to quietly track competitors and push rents higher under a proposed settlement between RealPage Inc. and the Department of Justice aimed at ending what prosecutors called illegal “algorithmic collusion.”
The agreement, announced Monday, resolves a yearlong federal antitrust lawsuit brought during the Biden administration against the Texas-based company. RealPage would not pay damages or admit wrongdoing; the settlement still requires a judge’s approval.
RealPage’s software gives landlords daily pricing recommendations for available apartments. Landlords are not required to follow those suggestions, but critics say the system’s access to large amounts of confidential data effectively helps clients extract the highest possible rents across markets.
“RealPage was replacing competition with coordination, and renters paid the price,” said DOJ antitrust chief Gail Slater, noting the settlement avoids a costly trial. Under the settlement, RealPage may no longer use real-time nonpublic data to generate price recommendations. Any nonpublic data used to train the algorithm must be at least one year old.
Slater said the change will promote “more real competition in local housing markets” and ensure “rents set by the market, not by a secret algorithm.”
RealPage attorney Stephen Weissman said the company welcomed the DOJ’s willingness to settle. He argued that there has been misinformation about how the software works and that RealPage’s historical use of aggregated, anonymized nonpublic data — which can include rents lower than advertised — produced procompetitive effects such as lower rents and fewer vacancies.
The settlement drew criticism from consumer and competition advocates who called it a missed chance to more broadly restrain algorithmic price-fixing. Lee Hepner, senior legal counsel at the American Economic Liberties Project, said the case was “the tip of the spear” and warned the deal contains loopholes that could allow RealPage to keep influencing markets even if limited to public data. He also objected to RealPage paying no damages, noting other firms have faced multimillion-dollar penalties related to similar practices.
Several property managers have separately settled claims tied to RealPage’s software in recent months. Greystar, the nation’s largest landlord, agreed to pay $50 million to resolve a class action and an additional $7 million to settle a lawsuit by nine states.
At the state and local level, lawmakers have moved quickly: California and New York governors recently signed laws targeting rent-setting software, and cities including Philadelphia and Seattle have banned or restricted the tools. Ten states — California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee and Washington — joined the DOJ’s lawsuit but were not party to Monday’s settlement.