DoJ agrees to settle with RealPage in rent collusion software case
Last year, the Department of Justice filed an antitrust suit against software company RealPage, accusing it of manipulating the rental housing market and driving up prices. Now, the DoJ has announced a proposed settlement that would put limits on RealPage's ability to collect and use sensitive information gathered from landlords. Under the terms, though, RealPage would pay no damages and admit to no wrongdoing.
Texas-based RealPage’s software is said to manage over 24 million rental units globally. The DOJ’s original complaint accused the company of working with landlords who agree to share “nonpublic, competitively sensitive information” about rental rates and other lease terms. RealPage then uses that data to train algorithms for its YieldStar software, which generate pricing and other recommendations “based on their and their rivals’ competitively sensitive information,” according to the DOJ.
If approved by the court, the settlement would require RealPage to only used landlord data that's 12 months or older in its algorithm. RealPage would also need to "remove or redesign" features that discourage landlords from lowering prices or prompt them to match competitors' prices. Its software would not be allowed to offer "hyperlocalized pricing" information that can manipulate rents "block-by-block," according to the DoJ's assist attorney general, Abigail Slater.
"Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement," Slater said in a statement.
However, as the dedicated real estate site Propmodo put it, the "outcome looks much closer to a reset than a punishment," adding that the government will likely focus enforcement on tools that steer collective behavior. "Algorithms will continue to shape pricing strategies, but with clearer boundaries." This article originally appeared on Engadget at https://www.engadget.com/apps/doj-agrees-to-settle-with-realpage-in-rent-collusion-software-case-130002364.html?src=rss
