Four plaintiffs have brought a class action complaint against RealPage and a number of landowners who use RealPage’s software for antitrust collusion. They allege that RealPage’s software, which takes in private rental data from its users and then provides rent prices to the property managers, is anti-competitive price-fixing.
As has been previously covered by Law Street, RealPage is a software company who provides numerous services for property management companies, including marketing, housing portals, renter payment platforms, accounting, and market survey data. At issue in this case is software they acquired in 2o02, called YieldStar, which mines private data from RealPage’s customers and public data from other properties to calculate an optimum rent that its customers should charge for a given apartment or house.
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Per the complaint, since then, RealPage has grown considerably through attracting new customers and acquiring competitors. As their market share has grown, YieldStar has become more efficient at setting leasing rates across a given market. Furthermore, property owners and managers who use this software are required to use the algorithm-generated lease price at least 80% of the time, and they must submit a justification for deviating from said price.
The complaint argues that prior to YieldStar and related software, landowners would set prices with a mindset to minimize vacancy. When occupancy dropped, rent rates would drop so that properties could fill up again. When vacancy was low, rents would increase to match demand. Without active knowledge of competitor actions, these owners had to react to price drops, since an owner who reduced their prices could quickly gain market share.
