The recent antitrust charges brought against RealPage, a property management software company, have sparked concerns about the impact of algorithms on collusion among landlords, ultimately harming renters across various US markets. The Department of Justice, along with eight US states, filed a civil lawsuit alleging that RealPage holds a monopoly over commercial revenue management software, enabling landlords to charge inflated prices and stifle competition.
The lawsuit claims that RealPage’s algorithmic software processes real-time pricing data and confidential information from competitors to generate pricing recommendations that allow landlords to charge higher rents than they typically would. This behavior is described as “classic price fixing” by Attorney General Merrick Garland, who emphasized the importance of competition among landlords to protect renters. The lawsuit marks the first time US prosecutors have targeted anticompetitive practices driven by computer algorithms.
RealPage’s Response
RealPage has vehemently denied the allegations, stating that the lawsuit is a distraction from the fundamental issues driving rental inflation, such as housing supply shortages and high mortgage rates. The company’s spokeswoman criticized the timing of the lawsuit, claiming that RealPage has been cooperative in addressing antitrust concerns in the past. RealPage dismissed the claims as lacking merit and argued that their technology has been used responsibly for years to benefit consumers.
Assistant Attorney General Jonathan Kanter highlighted the role of data science experts in uncovering how algorithms can be manipulated to achieve anticompetitive outcomes in the rental market and beyond. Kanter emphasized that algorithms can process vast amounts of information at high speeds, giving companies like RealPage an unfair advantage that can lead to market distortions and monopolistic practices. RealPage’s extensive market presence, particularly in the US Sunbelt and South regions, has raised concerns about the concentration of power in the hands of a single company.
The antitrust charges against RealPage shed light on the evolving landscape of competition in the digital age, where algorithms play a central role in shaping market dynamics. The lawsuit represents a significant step by US prosecutors to address anticompetitive behaviors driven by technological advancements. As the case unfolds, it will be crucial to examine how algorithms can be regulated to prevent collusion and ensure fair competition in the rental market and beyond.
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