RealPage Price-Fixing for Rentals Antitrust Class Action

This class action involves the fixing or raising of rental prices, via violations of antitrust laws, through the use of a platform called AI Revenue Management (formerly known as YieldStar). The complaint alleges that RealPage, the developer of the platform, has conspired with a long list of managers of large-scale residential apartment buildings, such as Greystar Real Estate Partners, LLC, Lincoln Property Co., and FPI Management, Inc. “to coordinate and agree upon rental housing pricing, among other things, throughout” the country.

The class for this action is all persons and entities who paid rent for a residential unit owned, managed, or controlled by a defendant in this case using YieldStar, AI Revenue Management, or any other RealPage software, between January 1, 2016 and the present.

Before YieldStar or AI Revenue Management software existed, the complaint says, property managers generally set prices for their units independently, to maximize occupancy. When units were standing empty, they had an incentive to lower their prices. This is no longer the case with RealPage’s software.

The complaint alleges, “AI Revenue Management works by collection vast amounts of non-public data from its client property managers regarding lease transactions, rent prices, occupancy levels, and virtually every other possible data point relevant to rent prices.” RealPage then combines this with other data, the complaint alleges, after which the algorithm comes up with a rental rate for each unit owned or managed by these clients.

RealPage provides “the anticompetitive exchange of nonpublic and competitively sensitive information” among those who normally would be competitors, the complaint says, and requires that clients “accept the software’s rental price at least 80-90 percent of the time.” It even polices members, to make sure they are doing this, the complaint claims: “Any client property manager who chooses to diverge from the algorithm’s price is expected to provide justification to a Revenue Management Advisor[].”

Also, the complaint claims that the software adjusts lease renewal dates, to make sure that not too many units will become empty at the same time, and that RealPage offers online forums and in-person events so that clients can exchange information and coordinate prices directly.

Thus, the complaint claims, RealPage and its clients are “a price-fixing cartel, and the revenue growth they have achieved is possible only through coordinated price setting.”

“A recent analysis conducted by ProPublica[,]” the complaint claims, “showed that rents in areas where RealPage clients control a high percentage of rental units have increased at a significantly higher rate than those where the company’s influence is weaker.”

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, Antitrust, Collusion and Price Fixing