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(Bloomberg) -- The Justice Department is thrusting the largest rental property managers into the spotlight as it expands a price-fixing lawsuit alleging widespread collusion in the housing rental market.
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In an amended lawsuit against RealPage Inc., a top software provider to the multifamily rental industry, the Justice Department on Tuesday accused seven major landlords including Cushman & Wakefield Plc and Greystar Real Estate Partners LLC, as well as a Blackstone Inc. portfolio company, of illegally colluding to drive up rent prices. In a separate filing, the Justice Department said it was settling with one of the landlords, Cortland Management LLC.
Landlords understand that RealPage’s products “use their data to recommend prices not just for their own units, but also for competitors,” the Justice Department said. “Landlords agree to provide this information for use by their competitors because they understand they will be able to leverage the sensitive information of their rivals in turn.”
As part of the settlement, Cortland agreed to stop using shared algorithms and competitively sensitive data to set rents. The company said in a statement that it was pleased to put the investigation behind it and that the Justice Department had closed a separate criminal investigation.
A representative for Cushman said Pinnacle Property Management Services LLC, which it acquired in 2020 and is also a named defendant in the lawsuit, is solely a property manager and doesn’t make decisions on how rents are set. Greystar said it didn’t engage in any anticompetitive practices and will “vigorously defend” itself in the lawsuit.
Representatives for the other firms didn’t immediately respond to requests for comment.
Last year, the DOJ sued Thoma Bravo LLC’s RealPage for allegedly violating antitrust law by helping property owners and managers collude on millions of units across the country.
The Biden Administration has made antitrust enforcement and competition policy a central piece of its economic agenda, particularly in key industries that impact people’s daily lives like housing.
Managing the lawsuit will fall to the incoming Trump Administration and Gail Slater, President-elect Donald Trump’s pick to run the DOJ’s antitrust division.
In the original complaint filed in August by the DOJ and a group of state attorneys general in North Carolina federal court, antitrust enforcers said RealPage’s software, which helps landlords set rental unit pricing, has effectively raised prices on renters illegally.