Colorado AG joins lawsuit accusing RealPage of illegal rent price-fixing scheme
DENVER (KDVR) — Colorado Attorney General Phil Weiser announced Friday that the state is joining the U.S. Department of Justice in an antitrust lawsuit, accusing real estate software company RealPage of an illegal scheme in which landlords allegedly coordinate to hike rental prices.
The lawsuit accuses Texas-based RealPage of “harming competition and renters by using illegal agreements with landlords to carry out a price-fixing scheme that has cost Coloradans millions of dollars in rent payments,” a release from the Attorney General’s office states.
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RealPage sells software to landlords who agree to share competitively sensitive data, like rents, lease terms and projected future vacancies, ultimately distorting the housing market for American renters, according to the lawsuit.
“RealPage has built a business out of frustrating the natural forces of competition. In its own words, ‘a rising tide raises all ships,'” the complaint reads.
The complaint states that Americans are entitled to the benefits of competition among landlords.
“RealPage replaces competition with coordination. It substitutes unity for rivalry. It subverts competition and the competitive process. It does so openly and directly—and American renters are left paying the price,” the complaint states.
Weiser said the lawsuit was filed to hold RealPage accountable for the anticompetitive conduct that is driving rent increases.
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“Half of renters in Colorado spend more than 30% of their income on housing costs. Renters should benefit from healthy competition between landlords to find an apartment that fits their budget and needs. But RealPage’s software and market dominance have enabled collusion between landlords to fix rents, set the number of apartments available in the market, and harm renters by forcing them to pay rents above competitive levels.” Weiser.
The lawsuit accuses the company of making it easy for landlords to accept price recommendations, and difficult to decline them, as well as getting landlords to end deal sweeteners and tracking apartment availability so landlords in high-demand markets can keep properties off the market and drive up rents.
“As a result, a large percentage of landlords license the software and choose to share their information with RealPage to “eliminate the guessing game” of what their competitors are doing in the market and to maximize rents at the expense of renters. At the same time, RealPage has been able to attract more landlords and accumulate a massive reservoir of competitively sensitive data to control about 80% of the market for commercial revenue management software for landlords,” the release from the Attorney General’s office states.
The Associated Press reports that RealPage said the Justice Department’s claims were “devoid of merit and will do nothing to make housing more affordable.”
“We are disappointed that, after multiple years of education and cooperation on the antitrust matters concerning RealPage, the DOJ has chosen this moment to pursue a lawsuit that seeks to scapegoat pro-competitive technology that has been used responsibly for years,” the company said.
Weiser joins attorneys general from California, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, Washington and the U.S. Department of Justice in the lawsuit, which seeks to end the anticompetitive agreements among RealPage and its landlord customers, as well as end the company’s “illegal monopoly in revenue management software built on competitors’ data.”
The Associated Press contributed to this report.
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