DOJ sues RealPage over alleged software program used to repair lease costs with landlords

U.S. Attorney General Merrick Garland speaks to reporters during a brief press conference at the Justice Department in Washington, U.S., May 4, 2023.

Kevin Lamarque | Reuters

The Justice Department and eight states on Friday accused software company RealPage of illegally attempting to undermine competition among landlords and create a monopoly that harms millions of renters.

RealPage “enables landlords to manipulate, distort and undermine market forces,” the Justice Department said in a civil lawsuit filed in U.S. District Court in North Carolina.

“Essentially, RealPage is an algorithmic intermediary that collects, combines and exploits landlords’ competitive information,” the antitrust complaint states.

“And in doing so, it enriches itself and compliant landlords at the expense of tenants who pay excessive prices and at the expense of honest businesses that would otherwise be competing,” the Justice Department alleged.

Attorney General Merrick Garland put it even more clearly in a press conference Friday morning: “Everyone knows that rent is damn high, and we argue that's one of the reasons why.”

With this lawsuit, the government is for the first time accusing a company of attempting to systematically undermine the rules of free competition with the help of mathematical algorithms.

“Antitrust law will not become obsolete just because competitors find new ways to act together illegally,” Garland said.

“And Americans shouldn't have to pay more rent just because a company found a new way to negotiate with landlords and break the law.”

The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington are supporting the Justice Department in its lawsuit.

This is breaking news, please check back later for updates.

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— CNBC’s Eamon Javers contributed to this report.