Last year, the Justice Department filed an antitrust lawsuit against software company RealPage, accusing the company of manipulating the rental market and driving up prices. Now the Department of Justice advertisement a proposed regulation that would limit RealPage’s ability to collect and use proprietary information. However, under the terms, RealPage will not pay any damages or admit any fault.
Texas-based software from RealPage is (called We manage more than 24 million rental properties worldwide. The Justice Department’s initial complaint accused the company of working with landlords who agreed to share “non-public and competitively sensitive information” about rents and other lease terms. RealPage then uses that data to train algorithms for its YieldStar software, which generates prices and other recommendations “based on relevant competitive information from itself and its competitors,” the DOJ said.
If the court approves the settlement, RealPage would only have to use owner data going back 12 months or more in its algorithm. RealPage should also “remove or redesign” features that prevent owners from lowering prices or bringing them in line with competitors’ prices. According to Abigail Slater, deputy attorney general at the US Department of Justice, their software would not be able to provide “hyperlocal price information” that could manipulate rental prices “block by block”.
“Competing companies must make independent pricing decisions, and with the advent of algorithms and artificial intelligence, we will continue to be at the forefront of robust antitrust enforcement,” Slater said in a statement.
But as a website dedicated to real estate promotion In short: “The result looks much more like a reset than a punishment,” adding that the government is likely to focus law enforcement on tools that control collective behavior. “Algorithms will continue to shape pricing strategies, but with clearer boundaries.”