Biden DOJ Initiates Legal Action Against Prominent Property Managers for Alleged Price Collusion
The U.S. Department of Justice announced on Tuesday that it has named six property management firms as co-defendants in an ongoing antitrust lawsuit. Originally, the lawsuit targeted RealPage, a real estate software provider. The DOJ claims RealPage was central to a conspiracy that stifled competition among landlords, thereby pushing up rental costs.
The lawsuit centers on RealPage’s “algorithmic pricing software.” This tool recommends rental prices by analyzing data, including sensitive competitive information shared by the landlords and their competitors. The DOJ highlighted these concerns in an August announcement about its initial legal complaint.
The updated lawsuit accuses six entities—Greystar Real Estate Partners LLC; Blackstone’s LivCor LLC; Camden Property Trust; Cushman & Wakefield Inc and Pinnacle Property Management Services LLC; Willow Bridge Property Company LLC; and Cortland Management LLC—of engaging in practices that undercut competition in apartment pricing. This, the DOJ claims, has adversely affected millions of renters across the United States.
According to the DOJ, these landlords manage over 1.3 million housing units across 43 states and the District of Columbia. The companies allegedly collaborated in various ways beyond using the contentious software from RealPage. Their tactics included sharing sensitive rental pricing and occupancy information with one another and participating in “user groups.” These groups, facilitated by RealPage, allegedly allowed landlords to discuss and align their pricing strategies and methodologies.
“As Americans nationwide struggled with housing affordability, the landlords implicated in today’s legal action were reportedly exchanging critical pricing information and using algorithmic tools to artificially inflate rental prices,” stated Doha Mekki, the acting assistant attorney general of the DOJ’s Antitrust Division.
The states of Illinois and Massachusetts have also joined the federal government as plaintiffs in the lawsuit.
The American Economic Liberties Project, an advocate for tackling corporate dominance, endorsed the DOJ’s intensified legal efforts. On Tuesday, they issued a statement warning, “Those who manipulate rental prices should expect to face serious legal repercussions from the DOJ.”
Tony Carrk, executive director of the consumer rights group Accountable.US, commented on the lawsuit, particularly highlighting the involvement of Camden Property Trust. He noted that such corporate landlords have profited immensely while allegedly exploiting RealPage’s algorithmic tools to maximize their earnings.
The Department of Justice disclosed that, pending court approval of a consent decree, it might settle its claims against one of the accused landlords, Cortland. Under this agreement, Cortland would assist the DOJ in its ongoing investigation and related legal actions.
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