The Justice Department said on Monday that it had reached an agreement to settle an antitrust lawsuit against RealPage, a real estate software company that the government accused of enabling landlords to collude to raise rents.
Using RealPage software, landlords shared information about their rents and occupancy rates with the company, after which an algorithm suggested what to charge renters. The government’s suit, which was joined by several state attorneys general, accused RealPage of taking the confidential information and suggesting rents higher than those in a free market.
Under the settlement proposal, which requires approval by a federal judge overseeing the case in the Middle District of North Carolina, RealPage’s software could no longer use information about current leases to train its algorithm. Nonpublic data from competing landlords would also be excluded when suggesting rents.
“Competing companies must make independent pricing decisions, and with the rise of algorithmic and artificial intelligence tools, we will remain at the forefront of vigorous antitrust enforcement,” said Gail Slater, who leads the antitrust division at the Department of Justice, in a news release.
Stephen Weissman, RealPage’s lawyer at the firm Gibson Dunn, said in a statement that the company denied any wrongdoing.
The company appreciated the government’s willingness to “bless the legality of RealPage’s prior and planned product changes,” he said. “There has been a great deal of misinformation about how RealPage’s software works and the value it provides for both housing providers and renters.”
The lawsuit, one of the most prominent civil actions that placed an algorithm at the center of a price-fixing case, was filed last year as politicians increasingly focused on the rising cost of housing. Former Vice President Kamala Harris raised concerns about the use of algorithms to set rents while running for president last year. New York became the first state to ban the practice in October.
The states that joined the original lawsuit were not included in Monday’s settlement.
David McCabe is a Times reporter who covers the complex legal and policy issues created by the digital economy and new technologies.
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