According to The Verge, the Department of Justice has reached a settlement with RealPage that fundamentally restricts how its rent-setting software operates. The DOJ accused RealPage of facilitating collusion by sharing previously private information between competing landlords through its algorithm. Under the settlement awaiting court approval, RealPage can only use landlord data that’s 12 months or older to power its pricing suggestions. The company must remove or redesign features that discourage price reductions and eliminate hyperlocalized “block-by-block” pricing information. Assistant Attorney General Abigail Slater stated RealPage was “replacing competition with coordination” while the company maintains it did nothing wrong.
How the software worked
Here’s the thing about RealPage’s system – it basically created a centralized brain for rental pricing across competing properties. Landlords who normally would be guessing about market rates suddenly had access to real-time competitor data. The software would analyze this pooled information and spit out daily price suggestions. And when one landlord increased rents, the algorithm would nudge others to follow suit. It’s like having a poker game where everyone can see each other’s cards, but the tenants are the ones who ultimately pay the price.
The settlement impact
So what does this settlement actually change? Well, the 12-month data restriction is huge. Think about how much rental markets can shift in a year – that’s basically ancient history in real estate terms. The hyperlocal pricing ban is equally significant. No more algorithmic suggestions that push rents higher block-by-block based on what the property across the street is charging. RealPage now has to operate with one hand tied behind its back, using stale data without the granular neighborhood insights that made its recommendations so powerful. But here’s the question: will this actually bring rents down, or just make pricing less efficient?
Broader implications
This case isn’t just about RealPage – it’s about algorithmic pricing across industries. The DOJ is sending a clear message that you can’t use technology to coordinate prices that would be illegal if done through old-school meetings and phone calls. The settlement details show the government is getting serious about regulating how algorithms impact competition. Assistant Attorney General Slater emphasized in her video explanation that “renters paid the price” for this coordination. Meanwhile, RealPage’s statement maintains their innocence while accepting the restrictions. It’s a classic regulatory compromise – nobody gets everything they want, but the system gets reshaped.
