Golden State Today

California Attorney General Rob Bonta, in collaboration with the U.S. Department of Justice and a bipartisan coalition of eight attorneys general, has filed a lawsuit against RealPage, a revenue management software company. The lawsuit alleges that RealPage enabled landlords to artificially raise rents through a pricing alignment scheme, facilitated by the illegal sharing of confidential pricing and supply information. This practice is said to have decreased competition, limited price negotiation, and increased rental prices across California, particularly in Southern California.

“Anticompetitive agreements are illegal, whether done by a human or software program. RealPage misused private and sensitive consumer data to take the competition out of the rental industry, leaving renters no other choice but to pay the intentionally high prices that landlords agreed to set,” stated Attorney General Bonta. “This means that even if rental home supply was high, rent prices stayed the same, and in some cases, rents went up. This conduct is unacceptable and illegal, and given California’s current housing shortage and affordability crisis, it is causing real harm. Every day, millions of Californians worry about keeping a roof over their head and RealPage has directly made it more difficult to do so.”

RealPage operates by generating rent increases for landlords using algorithmic models that recommend price hikes based on competitively sensitive data gathered from competing landlords. This data is shared among subscribers who understand they will benefit from knowing their rivals' pricing strategies. As a result, RealPage's recommendations help landlords uniformly set or raise prices, effectively eliminating competition.

Over recent decades, housing needs in California have significantly outpaced production. Consequently, housing costs have surged, making it increasingly difficult for residents to afford rent. Currently, 17 million renters in California spend substantial portions of their income on housing costs with an estimated 700,000 at risk of eviction.

The lawsuit claims that RealPage violated Sections 1 and 2 of the Sherman Antitrust Act by engaging in anticompetitive agreements and monopolization practices. The alleged actions include unlawfully maintaining monopoly power by sharing nonpublic data to align landlord pricing strategies.

The lawsuit aims to terminate:

- Anticompetitive agreements between RealPage and its landlord customers involving confidential information sharing.

- The pricing alignment scheme designed to increase rents.

- RealPage’s monopoly in revenue management software built on competitors’ data.

Attorney General Bonta joins forces with the U.S. Department of Justice and attorneys general from Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee, and Washington in this legal action.