The Division of Justice and eight states’ lawyer generals filed an antitrust lawsuit towards rental software program firm RealPage on Friday, accusing it of utilizing algorithms to drive up hire costs nationwide. The swimsuit alleges RealPage’s software program, YieldStar, gathers delicate data from landlords and rental corporations, which it feeds into algorithms that advocate costs and practices that restrict competitors and drive renters to pay extra.

“People shouldn’t must pay extra in hire as a result of an organization has discovered a brand new strategy to scheme with landlords to interrupt the regulation,” Legal professional Common Merrick Garland wrote in a DOJ press launch.

RealPage’s software program reportedly manages greater than 24 million rental models globally. The DOJ’s criticism accuses the Texas-based firm of contracting with competing landlords who conform to share “nonpublic, competitively delicate data” about rental charges and different lease phrases. RealPage then trains YieldStar’s algorithms, which generate pricing and different aggressive suggestions “based mostly on their and their rivals’ competitively delicate data,” in keeping with the DOJ.

The DOJ was joined in its swimsuit by the lawyer generals of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington. It filed the lawsuit within the US District Courtroom for the Center District of North Carolina, accusing the corporate of violating Sections 1 and a couple of of the Sherman Act. The 1890 regulation is taken into account the bedrock of US antitrust actions.

As well as, the lawsuit accuses RealPage of monopolizing the rental market in a suggestions loop that “strengthens RealPage’s grip available on the market,” making it tougher for “sincere companies to compete on the deserves.”

The DOJ’s criticism cites inside paperwork and sworn testimony from the corporate, together with landlords who’ve used the software program to allegedly price-gouge renters. The company says RealPage admitted its software program was designed to maximise hire costs, saying its product excels at “driving each potential alternative to extend worth,” “keep away from[ing] the race to the underside in down markets” and “a rising tide raises all ships.”

As well as, the DOJ quotes a RealPage govt as observing that its software program helps landlords keep away from competing. The chief allegedly opined that “there’s better good in all people succeeding versus primarily attempting to compete towards each other in a manner that truly retains the complete business down.” (Maybe the chief doesn’t contemplate renters a part of “the better good.”)

The DOJ additionally quotes a RealPage govt as explaining to a landlord that its competitor information can assist spot conditions the place they “might have a $50 improve as an alternative of a $10 improve for the day.” The swimsuit even cites a landlord’s remark that YieldStar helps the availability aspect management the market. “I at all times preferred this product as a result of your algorithm makes use of proprietary information from different subscribers to counsel rents and time period. That’s basic worth fixing.”