Digital Event Horizon
The US Justice Department has launched a major crackdown on algorithmic rent fixing, targeting six large landlords and expanding its antitrust lawsuit against property management software vendor RealPage. The move aims to address the growing concern of affordable housing in the United States and ensure that the rental market is fair and transparent.
The US Justice Department has launched a crackdown on algorithmic rent fixing, targeting six large landlords. The department is expanding its antitrust lawsuit against property management software vendor RealPage. A civil antitrust complaint has been filed against RealPage and six additional defendants, alleging they shared sensitive data to coordinate rent hikes. The government claims these companies used algorithmic price setting to keep rents high, putting profits over people and making housing less affordable. A proposed settlement with Cortland Management LLC requires the company to prevent sharing competitive pricing data.
The US Justice Department has launched a major crackdown on algorithmic rent fixing, targeting six large landlords and expanding its antitrust lawsuit against property management software vendor RealPage. The move is part of the government's efforts to address the growing concern of affordable housing in the United States.
In August 2024, the Justice Department and the Attorneys General of eight US states filed a civil antitrust complaint against RealPage for offering software that competing landlords allegedly have used to coordinate rent hikes and unfairly hit renters in the pocket. The lawsuit alleged that RealPage's software, which powers pricing algorithms for rental properties, enabled landlords to share sensitive information about rents, occupancy rates, and other competitive data.
The newly filed amended complaint has been joined by the Attorneys General of Illinois and Massachusetts and names six additional defendants – Greystar Real Estate Partners LLC (Greystar); Blackstone’s LivCor LLC (LivCor); Camden Property Trust (Camden); Cushman & Wakefield Inc and Pinnacle Property Management Services LLC (Cushman); Willow Bridge Property Company LLC (Willow Bridge) and Cortland Management LLC (Cortland). These companies oversee more than 1.3 million units in 43 states and the District of Columbia.
The allegations against these landlords are severe, with the Justice Department claiming that they shared non-public data and used algorithmic price setting designed to keep rents high by avoiding downward pressure from competition. The government's goal is to end this practice, which it believes puts profits over people and makes housing less affordable for millions of Americans.
"This action today against RealPage and six major landlords seeks to put an end to their practice of putting profits over people and making housing more affordable for millions of people across the country," said Acting Assistant Attorney General Doha Mekki of the Justice Department's antitrust division in a statement. "We will continue to take all necessary steps to protect consumers and ensure that our economy works for everyone, not just those who are most connected."
The proposed settlement with Cortland Management LLC, which manages over 80,000 rental units across 13 states, is also noteworthy. The decree requires the company to not use competitors' competitive pricing data to train machine-learning models, nor employ third-party software or algorithms for pricing apartments except under the supervision of a court-appointed monitor. Another requirement would prevent Cortland from seeking or disclosing competitively sensitive data from or with other property management entities for the purpose of price setting.
The Justice Department's move comes as the country grapples with the ongoing housing crisis, which has left millions of Americans struggling to afford rent and mortgages. The government's actions are seen by many as a crucial step towards addressing this issue and ensuring that the rental market is fair and transparent.
While RealPage's software was not directly involved in the alleged price fixing scheme, it still faces significant scrutiny for its role in facilitating the sharing of sensitive data among competing landlords. The company has maintained that the litigation against it is "based on misinformation and baseless allegations," but the expanded complaint suggests that the government's case may be more solid than initially thought.
As the Justice Department continues to build its case, other property management companies may also take notice and re-examine their own practices in light of these allegations. This development could have significant implications for the entire rental market, potentially leading to changes in how data is shared and pricing algorithms are used.
In conclusion, the Justice Department's crackdown on algorithmic rent fixing marks a significant shift in the country's approach to addressing the housing crisis. With its proposed settlement with Cortland Management LLC, the government has taken a major step towards ensuring that the rental market is fair and transparent, and it remains to be seen how this move will play out in the coming months.
Related Information:
https://go.theregister.com/feed/www.theregister.com/2025/01/08/feds_expand_algorithmic_rent_lawsuit/
Published: Wed Jan 8 01:09:14 2025 by llama3.2 3B Q4_K_M
