The archive · Developer & Business Tools · Strategic decision · 2022–2023
RealPage's shared-data rent algorithm draws a D.C. 'cartel' antitrust suit
D.C.'s attorney general sued 14 landlords who priced with RealPage software; its 19.7M-unit data network became the antitrust question.
RealPage
What the business is
RealPage sells revenue-management software to apartment landlords: the system estimates housing supply and demand and outputs the rent that maximizes each landlord's revenue; landlords upload private data, and the D.C. complaint alleges RealPage polices adoption of its recommended rents, with expulsion for landlords who deviate.
How it started
By late 2022 the arrangement was already the D.C. region's default: the lawsuit describes landlords uploading private demographic and geographic data, agreeing to use RealPage-generated rents and helping recruit new landlords, with expulsion for those who failed to impose them. RealPage's own 2020 10-K said its software served 19.7M U.S. rental units — more than a third of the country's stock — and the complaint says RealPage's software set the rent on more than 30% of D.C.'s multifamily apartments (60% of units in large multifamily buildings).
What happened
U.S. Senators Klobuchar, Durbin and Booker asked the DOJ to investigate 'anticompetitive concerns' around RealPage in November 2022; The Wall Street Journal reported in October 2023 that the DOJ was investigating and considering enforcement. On 2023-11-01 D.C. Attorney General Brian Schwalb sued 14 of the city's biggest landlords, dubbing them a 'cartel' that inflated rents using RealPage Revenue Management Software; the complaint says the software's dominant position 'stems directly from its unrivaled access to proprietary data', a former RealPage director said it 'pushed up pricing across the board', and similar federal suits against RealPage and rival Yardi Systems were already pending in Tennessee and Washington. RealPage's communications SVP said the company will 'vigorously defend' and called the suit a 'copycat' repeating predecessor inaccuracies.
No ending yet — it is still running.
Background
RealPage built its business on a simple promise to apartment landlords: let our software estimate supply and demand and it will output the rent that maximizes your revenue. Its bet was that landlords would hand rent-setting to a shared algorithm — pooling private data, following the recommended price, recruiting other owners — and that the resulting data network would be a legitimate moat, not collusion.
By the time regulators moved, the network had won: RealPage's 2020 annual report said its software served 19.7M U.S. rental units, more than a third of the national stock, and the D.C. complaint says RealPage-generated rents covered more than 30% of the city's multifamily apartments and 60% of units in large multifamily buildings. Landlords uploaded private data and helped recruit new members; the complaint alleges the company policed compliance, with expulsion for landlords who charged other rents.
The blowback escalated in public steps: senators asked the DOJ to investigate in November 2022, The Wall Street Journal reported a DOJ probe in October 2023, and on 2023-11-01 D.C. Attorney General Brian Schwalb sued 14 of the city's biggest landlords as a 'cartel'. RealPage said it would 'vigorously defend' and called the action a copycat of earlier suits already pending in Tennessee and Washington; as of the November 2023 reports no court had resolved whether shared-data algorithmic pricing is lawful unilateral conduct or coordinated price-fixing.
What has to be true
- The moat was the accusation: the complaint credits RealPage's 'unrivaled access to proprietary data' — and that shared database is what made it look like a cartel.
- Scale made it a public question: when one algorithm sets more than 30% of a city's multifamily rents, individual landlord choices add up to market-wide price coordination.
- The escalation was dated and visible: senators' 2022 letter, the WSJ's October 2023 DOJ report and the November 2023 suit show regulators converging on algorithmic rent-setting before any verdict.
- Built-in compliance cuts both ways: features that make adoption stick — data uploads, recruitment, policing, expulsion — are exactly the evidence plaintiffs cite for an agreement to fix rents.
What can be applied
Pooled competitor data feeding one recommended price is a moat internally and a cartel externally: when software polices adoption, voluntary use starts to look like an agreement.
Aftermath
As of 2023-11-05, when the D.C. lawsuit story hit Hacker News, RealPage was still operating and defending: its communications SVP said the company would 'vigorously defend' and called the D.C. action a 'copycat' that repeated inaccuracies from predecessor cases, while the DOJ investigation reported by The Wall Street Journal remained open and federal suits against RealPage and Yardi Systems were pending in Tennessee and Washington. No court had ruled on whether landlords' shared use of RealPage's recommended rents amounts to an unlawful cartel or lawful unilateral pricing decisions.
Sources
- Big landlords are colluding to raise rents, D.C. lawsuit alleges
- D.C. OAG antitrust complaint against RealPage and 14 residential landlords
- Big landlords are colluding to raise rents, D.C. lawsuit alleges
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