The RealPage Settlement: A Betrayal of Free Market Principles and American Renters
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- 3 min read
The Facts: Algorithmic Price-Fixing and Regulatory Response
The recent settlement between the Trump Justice Department and RealPage represents a critical moment in the ongoing battle against algorithmic price-fixing in America’s rental markets. RealPage, a real estate software giant, was accused of illegally facilitating collusion between landlords to systematically drive up rents across the United States. The Department of Justice under the Biden administration initially sued RealPage last year, alleging the company ran an “unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software.”
The core of the government’s case rested on RealPage’s business model: the company contracted with competing landlords who agreed to share nonpublic, competitively sensitive information about their rental rates and lease terms. This data was then used to train and run RealPage’s algorithmic pricing software, which generated recommendations for participating landlords based on both their own data and their competitors’ confidential information. As the DOJ complaint highlighted, RealPage’s own words condemned them - the company described its products as “driving every possible opportunity to increase price.”
The settlement agreement, which must still be reviewed by a court, requires RealPage to “cease having its software use competitors’ nonpublic, competitively sensitive information to determine rental prices.” However, the settlement contains no financial penalties, no admissions of guilt, and RealPage has downplayed its impact, claiming the deal’s terms “bless the legality of RealPage’s prior and planned product changes.”
The Context: Systemic Harm and Broader Implications
The scale of harm caused by RealPage’s practices is staggering. A White House report released late last year estimated that the kind of algorithmic pricing RealPage enables cost renters across the United States nearly $4 billion in 2023 alone - and characterized this estimate as conservative. This systematic extraction of wealth from American families occurred during an unprecedented affordability crisis, making the harm particularly egregious.
The case also reveals the complex regulatory landscape surrounding algorithmic collusion. While traditional price-fixing through “smoke-filled backroom deals” is clearly illegal, the legal framework for algorithmic coordination remains less defined. This case tests whether using sophisticated software to achieve the same anti-competitive outcomes constitutes illegal collusion under existing antitrust laws.
Several states have taken independent action against both RealPage and its users. Nevada reached its own settlement with RealPage in September, while California, North Carolina, and other states recently announced a separate settlement with apartment management giant Greystar, one of the companies that used RealPage’s software. Under that agreement, Greystar agreed to pay $7 million in penalties and stop using RealPage’s software or similar products for pricing.
Opinion: A Dangerous Precedent and Betrayal of Market Principles
This settlement represents nothing less than a catastrophic failure of antitrust enforcement and a betrayal of free market principles. The absence of financial penalties or admissions of guilt sends a dangerous message to corporate America: algorithmic collusion may be technically complex, but it carries no meaningful consequences. When a company systematically facilitates price-fixing that extracts billions from American consumers without facing financial accountability, we have effectively legalized a new form of corporate collusion.
Abigail Slater, head of the DOJ’s Antitrust Division, may characterize this agreement as a win for competition and renters, but this assessment fundamentally misunderstands both the nature of the harm and the requirements of justice. Lee Hepner of the American Economic Liberties Project correctly identified this settlement as “a total farce” and “lipstick on a pig” that violates basic antitrust principles. As Hepner noted, “Fixing prices based on public data sets is still price fixing!”
The settlement’s failure to include financial restitution is particularly offensive given the documented $4 billion in harm to renters. This represents a massive wealth transfer from American families to corporate landlords and their enablers at RealPage. In a functioning justice system, those who facilitate billions in harm would face proportional consequences, not receive what amounts to regulatory approval for slightly modified business practices.
The Broader Threat to Economic Liberty
Basel Musharbash’s warning that this settlement “gives a green light to algorithmic price-fixing across the economy” should alarm every defender of free markets and economic liberty. When algorithms can be used to coordinate prices across supposedly competing entities, we are witnessing the erosion of market competition itself. This isn’t just about rental markets - it’s about whether we will allow technology to become a tool for circumventing fundamental antitrust protections that have safeguarded American consumers for generations.
The principles at stake go beyond immediate consumer harm. Algorithmic collusion represents a fundamental threat to market-based economies. When prices are determined not by competition and supply-demand dynamics but by coordinated algorithms, we abandon the very mechanism that makes free markets efficient and responsive to consumer needs. This settlement’s weakness essentially endorses this anti-competitive model, potentially opening the door for similar practices across numerous industries.
The Human Cost and Democratic Imperative
Behind the legal technicalities and corporate maneuvering lies a profound human cost. California Attorney General Rob Bonta correctly identified the context: “Families across the country are staring down an affordability crisis. Companies that intentionally fuel this unaffordability by raising prices to line their own pockets can be sure I will use the full force of my office to hold them accountable.” While states like California are taking appropriate action, the federal settlement represents a failure to match this commitment.
This case tests whether our regulatory institutions can protect citizens from sophisticated forms of corporate exploitation. The settlement suggests that when faced with complex technological schemes, our enforcement mechanisms may be inadequate. This should concern everyone who believes in both market competition and consumer protection.
Conclusion: A Call for Robust Enforcement
The RealPage settlement represents a dangerous precedent that threatens both market competition and economic justice. By failing to impose meaningful consequences for documented billion-dollar harm, the Justice Department has effectively signaled that algorithmic collusion may be technologically sophisticated but carries limited legal risk. This approach betrays both free market principles and the Americans who depend on functioning, competitive markets for basic necessities like housing.
Moving forward, Congress should consider clarifying that algorithmic coordination constitutes illegal collusion under antitrust laws. Enforcement agencies must recognize that sophisticated technology doesn’t change fundamental principles: coordination that harms competition and consumers remains illegal regardless of the mechanism. Most importantly, we must reject settlements that treat billion-dollar harm as a technical violation requiring only minor business practice adjustments.
The fight against algorithmic price-fixing isn’t just about rental markets or specific companies - it’s about whether we will preserve competitive markets in the digital age. This settlement represents a missed opportunity to defend both economic liberty and basic justice for American consumers. We must demand better from our institutions and stronger protection for the competitive markets that form the foundation of our economic system.