In a significant expansion of its antitrust lawsuit against RealPage, the U.S. Department of Justice has added six major apartment landlords as defendants, alleging their involvement in a widespread scheme to artificially inflate rents across the nation.
The amended civil complaint, filed on Tuesday, accuses these firms of using RealPage's rent-pricing algorithm to engage in illegal price fixing, potentially affecting millions of renters across the United States.
This move significantly broadens the scope of the original lawsuit filed in August against RealPage, which alleged that the company's software stifled competition and maintained an illegal monopoly over rent-setting software.
The newly named defendants include the country's largest apartment owners: Greystar Real Estate Partners, Blackstone's LivCor, Willow Bridge Property Company, Camden Property Trust, Pinnacle (and its parent company Cushman & Wakefield), and Cortland. Together, these firms oversee more than 1.3 million units throughout the U.S., representing a substantial portion of the rental market.
The Justice Department's complaint alleges that these companies not only used RealPage's algorithm but also participated in "call arounds" and "user groups" hosted by RealPage to exchange confidential rental data. This practice, according to the DOJ, allowed the landlords to coordinate their pricing strategies, leading to artificially inflated rents nationwide.
In response to the allegations, several of the named companies have issued denials. Greystar, the largest apartment owner in the U.S., stated that it "denies the Justice Department's accusations and plans to vigorously defend itself in the lawsuit". Similarly, a spokesperson for Cushman & Wakefield emphasized that Pinnacle "is solely a property manager and does not own properties or set pricing.” For its part, Camden released a statement that said it would vigorously defend itself against the claims and intends to move for dismissal.
Cortland, one of the named defendants, has taken a different approach. The company announced that it has agreed to a proposed settlement with the government. In a statement, Cortland explained, "We believe we were only able to achieve this result because Cortland has invested years and significant internal resources into developing a proprietary revenue management software tool that does not rely on data from external, non-public sources.”
RealPage, the central figure in the original lawsuit, continues to deny the allegations. The company maintains that its landlord customers are not required to use its price recommendations and that its software can actually recommend lowering rents in certain situations.
The addition of these major landlords to the lawsuit could have significant implications for ongoing private-sector lawsuits against some of these companies. Diana Moss, vice president and competition policy director at the Progressive Policy Institute, told The Wall Street Journal that the DOJ's expanded lawsuit creates a "mutually reinforcing effect of public and private enforcers working together.”
As the case moves forward, it is expected to face continued scrutiny and legal challenges. RealPage filed a motion to dismiss the civil suit in December, and the newly named defendants are likely to mount their own legal defenses. However, antitrust experts and industry analysts told the WSJ that they do not expect a significant shift in the enforcement posture, even with the upcoming change in administration.