New limits for a rent algorithm that prosecutors say let landlords drive up prices

Federal Prosecutors Reach Settlement with RealPage Over Rental Price Algorithm

Federal prosecutors announced Monday a settlement with RealPage Inc., ending a yearlong antitrust lawsuit that accused the Texas-based company of using rental pricing software to facilitate what critics called “algorithmic collusion” among landlords.

The Department of Justice’s settlement would restrict RealPage from using confidential, real-time data to drive its rent-setting algorithm. The company provides software that gives daily rent pricing recommendations to property managers across the United States.

“RealPage was replacing competition with coordination, and renters paid the price,” said DOJ antitrust chief Gail Slater, who emphasized that the settlement avoided a lengthy, expensive trial.

Under the proposed agreement, RealPage can continue operating its pricing software but must stop using non-public, real-time data to generate recommendations. The company can only use non-public data that is at least one year old to train its algorithms, a significant change from its previous practices.

“It means more real competition in local housing markets. It means rents set by the market, not by a secret algorithm,” Slater explained in a video statement about the settlement’s impact on consumers.

The antitrust lawsuit, filed during the Biden administration, alleged that RealPage’s software effectively allowed property managers to coordinate pricing decisions rather than competing with one another. Critics argued that the software’s access to vast amounts of confidential rental data enabled landlords to charge artificially inflated rents.

Ten states had joined the Justice Department’s lawsuit: California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington. These states were not part of Monday’s settlement and could continue pursuing legal action independently.

RealPage, which did not admit wrongdoing and will not pay damages under the agreement, defended its software through attorney Stephen Weissman. “There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters,” Weissman said in a statement.

The company maintains that its use of “aggregated and anonymized nonpublic data” actually led to lower rents and reduced vacancies, producing what it called “procompetitive effects” in the rental market.

The settlement comes amid increased scrutiny of algorithmic pricing tools across multiple industries. Some critics expressed disappointment with the terms, arguing they don’t go far enough to address broader concerns about digital price-fixing.

“This case really was the tip of the spear,” said Lee Hepner, senior legal counsel for the American Economic Liberties Project, which advocates for stronger government action against business concentration. Hepner criticized the settlement as containing loopholes and lamented that RealPage avoided paying damages.

The rental industry has faced mounting legal pressure over algorithmic pricing practices. More than two dozen property management companies have reached settlements regarding their use of RealPage software. Greystar, the nation’s largest landlord, agreed to pay $50 million to settle a class action lawsuit and an additional $7 million to resolve a separate lawsuit filed by nine states.

State and local governments have also begun taking legislative action. Both California and New York recently enacted laws targeting rent-setting software, while cities including Philadelphia and Seattle have passed similar ordinances restricting the practice.

The settlement still requires approval from a federal judge before taking effect.

As the rental housing market continues to face affordability challenges nationwide, the case highlights growing concerns about how technology may influence pricing across the economy and the evolving approach of regulators to address algorithmic coordination in various industries.