RealPage Seeks Dismissal of DOJ Antitrust Suit, Citing Legal Flaws

The DOJ and several states allege that RealPage’s software facilitates an “unlawful scheme” to inflate rental prices by suppressing competition among landlords, violating the Sherman Act. In its defense, RealPage contends that the government has failed to prove that its software has any anticompetitive impact. The company emphasized in its filing that the lawsuit is one in a series of “baseless” antitrust cases targeting its products.

Prior Legal Context

RealPage pointed to similar class action lawsuits filed against it, now consolidated in the U.S. District Court for the Middle District of Tennessee, where a judge rejected claims that its revenue management software constituted a price-fixing conspiracy in December 2023. Following that setback, the DOJ refocused its arguments on Sections 1 and 2 of the Sherman Act, which address anticompetitive conduct and monopolization.

RealPage maintains that the DOJ’s theories are insufficient, asserting that its software cannot independently raise rents beyond competitive levels. Per Bloomberg, RealPage said a significant market share—30% to 40% of available rental units—would need to rely on its AI Revenue Management or YieldStar products to have such an effect, a threshold not met in the DOJ’s complaint.

Disputed Market Definitions

A key point of contention is the DOJ’s definition of the relevant market and RealPage’s share within it. The DOJ alleges that RealPage holds an 80% share of the commercial revenue management software market for apartments in the U.S. However, Stephen Weissman, RealPage’s outside counsel and co-chair of Gibson Dunn’s Antitrust and Competition Practice Group, countered that the DOJ improperly inflated these figures. Weissman argued that the government included unrelated products, such as RealPage’s OneSite software, in its calculations. OneSite, according to Weissman, is not a revenue management tool and is often used independently of RealPage’s revenue-focused software.

Related: RealPage Legal Counsel Refutes DOJ Accusations of Collusion in Rental Market

Weissman further criticized the DOJ’s exclusion of alternative pricing tools, including in-house systems developed by landlords and traditional methods, which, if included, would diminish RealPage’s market dominance.

Monopolization Claims

The DOJ also accuses RealPage of monopolizing the market for revenue management software. RealPage refuted this, asserting that it has not engaged in any exclusionary conduct to prevent competitors from entering the market. Weissman emphasized that to establish a monopolization claim, the DOJ must prove both market power and exclusionary practices—criteria RealPage believes are absent.

“What DOJ has done is they’ve alleged, in conclusory terms, that RealPage’s revenue management software dominates a market they narrowly define, but their argument collapses under scrutiny,” Weissman said during a press briefing.

Case Outlook

The Justice Department has not responded to inquiries about RealPage’s latest filing. The motion to dismiss marks the company’s latest attempt to fend off allegations that it operates in violation of antitrust laws. The case’s outcome could have significant implications for the rental housing industry and the use of technology in pricing strategies

Source: Bloomberg