In a significant escalation of its fight against anticompetitive practices in the rental housing market, the U.S. Department of Justice announced Tuesday the filing of an amended complaint targeting six of the nation’s largest landlords and software provider RealPage for their alleged participation in algorithmic pricing schemes that have harmed millions of American renters.
The expanded lawsuit names Greystar Real Estate Partners LLC, Blackstone’s LivCor LLC, Camden Property Trust, Cushman & Wakefield Inc, Pinnacle Property Management Services LLC, Willow Bridge Property Company LLC, and Cortland Management LLC as defendants.Â
Collectively, these companies manage an extensive portfolio of more than 1.3 million rental units across 43 states and Washington D.C., underscoring the widespread impact of their alleged anticompetitive practices.
DOJ Sues Landlords and RealPage for Antitrust Violations
The Justice Department’s complaint alleges that these landlords engaged in a coordinated effort to suppress competition in apartment pricing through the use of RealPage’s algorithmic pricing software.Â
The companies are accused of sharing competitively sensitive information through these algorithms, leading to artificially inflated rental rates for tenants nationwide.
According to the DOJ’s investigation, the landlords employed multiple methods to coordinate their pricing strategies.Â
These included direct communications between senior management about sensitive topics such as rents and occupancy rates, systematic “call arounds” where property managers exchanged pricing information and strategies with competitors, and participation in RealPage-hosted “user groups” where companies collaborated on modifying the software’s pricing methodology.
The investigation uncovered evidence of regular communication between property managers through calls and emails, during which they allegedly shared and discussed competitively sensitive information about rents, occupancy, pricing strategies, and discounts.Â
This level of coordination, combined with the use of common pricing algorithms, allegedly created an environment where normal market competition was significantly reduced.
Landmark Lawsuit Challenges Use of Algorithms in Apartment Pricing
In a parallel development, the DOJ announced a proposed consent decree with one of the defendants, Cortland Management LLC. Under the terms of the agreement, Cortland must cease using competitor data for rent-setting purposes and stop utilizing the same algorithms as its competitors without oversight from a corporate monitor.Â
The company is also required to cooperate with the government’s ongoing investigation.
The legal action has garnered substantial support at the state level, with Attorneys General from ten states joining as co-plaintiffs. California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington have all joined the case, reflecting widespread concern over these alleged anticompetitive practices in the rental market.
The lawsuit comes at a critical time when housing affordability has become a major concern for many Americans. The DOJ’s action suggests increased scrutiny of how technology and data-sharing practices may be contributing to rising rental costs across the country.
The case represents a significant challenge to the growing use of algorithmic pricing tools in the real estate industry and their potential to facilitate anticompetitive behavior. If successful, this legal action could fundamentally change how property management companies use technology to set rental rates and could lead to significant reforms in industry pricing practices.
The outcome of this case could have far-reaching implications for the rental housing market, potentially affecting millions of renters across the United States. It also signals the Justice Department’s commitment to addressing anticompetitive practices in the digital age, particularly when such practices impact essential needs like housing.
