Rents in Portland have skyrocketed in recent years, sparking resistance among residents. (Getty Images)
Oregon’s attorney general has joined other states, the District of Columbia and the federal government in an antitrust lawsuit against a company that sells property management software that suggests rents.
The lawsuit against RealPage, a Texas-based company, accuses the company of collecting confidential rental data on more than 16 million properties in the United States in order to develop software that would allow landlords to match prices with each other instead of competing with each other. RealPage is said to have a monopoly on rental management software, controlling at least 80% of that market.
“Its dominant position is protected by substantial data advantages arising from its vast reservoir of improperly obtained competitively sensitive information from competing lessors,” the lawsuit said. “RealPage replaces competition with coordination. It replaces unity with rivalry. It undermines competition and the competitive process. It does this openly and directly – and American renters are paying the price.”
Submitted on Friday in U.S. District Court in North Carolina, the lawsuit comes at a time of rising rents in Oregon, particularly in the Portland area. Under normal market conditions, renters would benefit from competition among landlords, who would limit increases when the economy is booming and lower rents when the economy is tight to make housing more affordable, the lawsuit said. But RealPage’s software was said to stifle competition, something Oregon Attorney General Ellen Rosenblum said was illegal.
“RealPage’s use of its AI pricing algorithm effectively serves as a hub for property managers and landlords to share confidential, competitively sensitive information and engage in a price-fixing scheme to avoid competition,” Rosenblum said in a statement. “It undermines a fair rental market and violates Oregon and federal antitrust laws (the Sherman Act).”
Jennifer Bowcock, a spokesperson for RealPage, said in a statement that the company would “vigorously” defend itself against the allegations. She said its revenue management software is built to be “legally compliant.” and that the company had worked “constructively” with the Justice Department for years and that the agency had reviewed the software in 2017 and found nothing objectionable.
“We believe the Department of Justice’s claims are without merit and will do nothing to make housing more affordable,” Bowcock said.
The lawsuit names areas in 24 states — Arizona, Alabama, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Kansas, Ohio, Maryland, Massachusetts, Mississippi, Missouri, Nevada, New Hampshire, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia and Washington — where at least 30 percent of property managers use RealPage’s software. In Oregon, that includes 54,000 units in the Aloha-Beaverton area and central Portland, where a one-bedroom, one-bathroom unit can cost more than $2,200 a month.
“Americans should not have to pay more rent because a company found a novel way to negotiate with landlords in violation of the law,” U.S. Attorney General Merrick Garland said in a statement.
Rosenblum added that housing is a major issue in Oregon, where rents have skyrocketed in recent years.
“At a time when affordable housing is a top priority for Oregonians — and for countless Americans beyond our state’s borders — the issues of fairness and competition could not be more important,” she said.
In addition to Oregon, attorneys general from California, Colorado, Connecticut, Minnesota, North Carolina, Tennessee and Washington joined the lawsuit.
The U.S. Department of Justice—along with Oregon and other states—has also filed antitrust lawsuits against Amazonand Meta, the owner of Facebook. In December, Google agreed to pay $700 million to resolve an antitrust lawsuit over its Play Store, and in March the U.S. Department of Justice, Oregon and other states filed a lawsuit Appleand also alleged that there was monopolistic behaviour to prevent competition.
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