Justice Department targets landlords in pricing scheme

WASHINGTON - The U.S. Justice Department, in coordination with state co-plaintiffs, has expanded its antitrust lawsuit against RealPage Inc., now including six of the country's largest landlords in allegations of a collective pricing scheme that has potentially affected millions of renters. The amended complaint, filed today, targets Greystar Real Estate Partners LLC, LivCor LLC, Camden Property (NYSE:CPT ) Trust, Cushman & Wakefield (NYSE:CWK ) Inc, Willow Bridge Property Company LLC, and Cortland Management LLC, accusing them of collusion to artificially inflate rental prices.

These entities collectively manage over 1.3 million housing units across 43 states and the District of Columbia. The lawsuit alleges that the landlords used sensitive competitive data and algorithmic software provided by RealPage to coordinate and maintain high rental prices. This practice, according to the Justice Department, stifles competition and harms consumers by keeping rents elevated.

The allegations detail various methods of coordination, including direct communication between competitors’ senior managers, "call arounds" for sharing sensitive information, participation in RealPage-hosted "user groups," and exchanging details on how to set parameters within RealPage’s pricing software. These practices, if proven, represent a significant breach of antitrust laws designed to protect free market competition and prevent collusion.

In parallel with the amended complaint, a proposed consent decree with Cortland has been filed. If approved by the court, Cortland will be required to cooperate with ongoing investigations and will be prohibited from using competitors' data to inform pricing models, among other restrictions. The decree mandates the appointment of a corporate monitor to oversee Cortland's compliance with these terms.

The consent decree will be subject to a 60-day public comment period as per the Tunney Act, after which the court may finalize the judgment. The case involves a total of ten state and commonwealth co-plaintiffs, including Attorneys General from California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington.

This legal action underscores the Justice Department's commitment to enforcing antitrust laws and ensuring competitive practices in the housing market. The information for this article is based on a press release statement from the Justice Department.

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Source: Investing.com