DOJ, 8 State AGs Sue RealPage for Alleged Sherman Act Violations in Algorithmic Pricing Scheme

Antitrust attorney David Kully was quoted in an article published by The Recorder discussing a lawsuit filed by the U.S. Department of Justice (DOJ) and eight states against RealPage, a real estate software company, for allegedly using an algorithmic pricing scheme to collude with landlords and artificially inflate rental prices. Mr. Kully pointed out that here, in contrast to previous antitrust lawsuits, the DOJ focuses on allegations of information-sharing rather than direct price-fixing, which means it has to provide concrete evidence of collusion among users of the algorithmic pricing software instead of merely demonstrating a decision to use it. The industry is keeping a close eye on the case because of its broader implications for the widespread use of pricing algorithms and the need to adapt legal frameworks to the complexities of artificial intelligence (AI) and digital tools in competitive practices.

"They think that information-sharing is anti-competitive, but they don't think it's price-fixing. And the implications of that are that price fixing is... per se illegal, making it easier for the plaintiffs to win the case. Information sharing is something that would have to be evaluated under the more extensive rule of reason, where the plaintiffs actually have to show more than they would than if it were a per se case," Mr. Kully explained.

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