US Rental Market | An Algorithm That Distorts Competition?

(New York) The US government announced on Friday the launch of civil proceedings against a software platform accused of limiting, through an algorithm, competition between landlords.


According to the US Department of Justice, RealPage pools data from many lessors and allows them to have a good overview of the state of the market and the practices of their competitors.

Thanks to its algorithm, the software YieldStar suggests in particular amounts to allow rental management companies to set the rents for their properties.

Without this platform, “they would not have access to this information,” Doha Mekki, of the Justice Department’s competition division, stressed during a telephone press briefing.

According to her, these practices therefore prevent “independent competition on rents and other aspects. […]. RealPage replaces competition with coordination,” and “it’s the tenants who pay the price.”

“RealPage knows what it’s doing,” U.S. Attorney General Merrick Garland said at a news conference about the company’s potentially anticompetitive practices.

The subpoena was filed in federal court in North Carolina after a nearly two-year investigation.

Among the evidence in its indictment, the Justice Department cites comments by RealPage executives who said that “it is better to see everyone succeed than to compete with each other in a way that hurts the entire industry.”

The U.S. government has said it has not ruled out possible prosecution of donors at a later stage.

“The market must be driven by healthy competition between landlords,” argued Lisa Monaco, Merrick Garland’s deputy. “Algorithms do not operate in a lawless zone.”

Training software to break the law is breaking the law.

Lisa Monaco, Assistant Attorney General of the United States

Since Joe Biden’s inauguration, the administration has been much more aggressive on competition law than its predecessors.

The US Department of Justice recently obtained a favorable judgment against Google and has also managed to thwart several mergers, notably between the airlines Spirit and JetBlue and between the publishers Penguin Random House and Simon & Schuster.


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