That report cited comments made by Jay Parsons, vice president of RealPage, in a meeting with a group of real estate technology executives. Claiming that “one of his company’s signature products: the software” “uses a mysterious algorithm to help landlords exact the highest possible rent on tenants,” Parsons enticed landlords. In a since-deleted video, he said apartment rents had recently increased 14.5 percent, bragging that “we’ve never seen these figures before” and prompting another executive to agree that RealPage was “running it quite honestly.” Business Insider called it landlords’ “secret weapon.”
Subsequently, critics told ProPublica that “at the very least,” RealPage’s “algorithms may artificially inflate rents and suppress competition,” noting that “machines quickly learn” to raise prices above competitive levels “to win.”
Today, RealPage’s site notes that “its suite of services is used to manage more than 24 million units worldwide.” The DOJ reported that in addition to collecting sensitive information about its customers – including rental prices, asking prices, discounts, vacancy and lease terms – RealPage also collected data by making “more than 50,000 monthly phone calls”, and conducting “market surveys” of landlords covering “more than 11 million units and approximately 52,000 properties”.
Landlords “knowingly shared this non-public information with RealPage,” the DOJ said, while “increasing rents disproportionately affected low-income residents.” Assistant Attorney General of the DOJ’s Antitrust Division, Abigail Slater, confirmed that the settlement will ensure that RealPage can no longer rely on such non-public data to help landlords set rental prices, while furthering the DOJ’s mission to stop price-fixing algorithms that harm Americans.
“Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will be at the forefront of vigorous antitrust enforcement,” Slater said.
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