In the latest front of the legal battle over the use of algorithmic pricing, RealPage, Inc. (“RealPage”) has challenged an ordinance passed by the City of Berkeley banning the use of revenue management software products like RealPage’s to set rent.
What is RealPage?
RealPage is a technology company that sells software products, including “revenue management software” (“RMS”). According to RealPage, its software “helps property owners set rents at levels that fill units at rates that renters are willing and able to pay, without overpricing or underpricing.” RealPage claims it doesn’t share competitive data, and rejects the idea that the goal of its software is to “maximize” rent.
But since 2022, RealPage has been sued repeatedly for alleged antitrust violations and anticompetitive conduct. The lawsuits involve three primary RealPage products: YieldStar Housing software (“YieldStar”); Lease Rent Options and Student Lease Rent Options (“LRO” and “SLRO”); and AI Revenue Management (“AIRM”), a combination of YieldStar and LRO.
Ordinance Litigation
In RealPage v. Berkeley, 3:25-cv-03004 (N.D. Cal.), RealPage challenges a City of Berkeley ordinance banning the use of any “coordinating pricing algorithm” by landlords to set rent or occupancy levels.
The ordinance at issue makes it unlawful to “sell, license, or otherwise provide” to Berkeley landlords, and for the landlords to use, any “coordinated pricing algorithm that sets, recommends, or advises on rents or occupancy levels that may be achieved for residential dwelling units in the city of Berkeley.” “Coordinated pricing algorithm” is defined as “any analytical or computation processes that use data to recommend or predict the price of consumer goods or services in direct or indirect coordination with one or more competitors,” including through a software program using algorithms based on competitor data.
The ban, RealPage alleges, is a content-based speech regulation that violates its First Amendment rights and 42 U.S.C. §1983 by prohibiting it from providing “information and advice” to owners through the provision of its software. The ordinance, RealPage claims, is both a content-based and speaker-based prohibition that restricts speech based on whether its content concerns dissemination of rental information or use of that information to give recommendations to landlords. Because the restriction is content-based, RealPage argues that it is subject to strict scrutiny.
RealPage affirmatively alleges that the ordinance is not covered by a “commercial speech” or advertisement exception to strict scrutiny, because the sharing of information is not a “proposal of a commercial transaction.” RealPage avoids taking a position at this stage on whether preventing collusion among competitors on rental prices or reducing rental prices is a compelling interest such that it would satisfy the first part of the strict scrutiny analysis, instead focusing on its argument that the ordinance is not narrowly tailored. Even if the speech were treated as regulating commercial speech, RealPage alleges that it would fail intermediate scrutiny for lack of tailoring. Finally, RealPage also asserts a claim under Section 1983 for unconstitutional lack of vagueness under the Due Process Clause.
Berkeley’s ordinance is not the first of its kind—San Francisco and Philadelphia have both passed similar ordinances, and RealPage does not appear to have explained why it chose the Berkeley ordinance to challenge first. RealPage’s complaint focuses on public statements made by local government officials in Berkeley, including a statement by Office of Vice Mayor and City Councilmember Ben Bartlett that RealPage “is currently under parole and facing sentencing for price-fixing practices,” which RealPage states is factually incorrect. RealPage also noted that it was identified by name in the ordinance itself several times, and that it categorically denied that it engages in, facilitates, or contributes to price fixing. Instead, RealPage accuses an organization called American Economic Liberties Project (“AELP”) of falsely attributing rising rent prices across the country to software products like RealPage’s, making it a “scapegoat” for problems caused by insufficient housing supply.
The lawsuit does not appear to have deterred local governments from pursuing similar ordinances banning the use of AI software in setting rental prices. On April 15, two weeks after RealPage initiated litigation against Berkeley, San Diego’s city council voted to pass its own ordinance. Associate general counsel for RealPage was at the council meeting and spoke against the ordinance, calling it overly vague and defending the company’s products. However, the office of Councilmember Sean Elo-Rivera cited RealPage’s YieldStar as one of the software programs the ordinance was meant to address, and City Attorney Heather Ferbert cited the federal and state investigations into similar software as one of the rationales for the ordinance.
It remains to be seen whether similar legislation will be enacted on the federal level. In January 2024, Senator Wyden and other senators proposed a bill that would limit the use of algorithms in setting rent, identifying RealPage as one of the driving factors behind the legislation and citing to a 2022 ProPublica article on the company’s software as contributing to higher rent prices. However, the bill has not progressed past its referral to the Judiciary Committee. Amy Klobuchar also introduced proposed legislation in February 2025 to ban the use of algorithms to set lower prices more broadly—while the legislation was not limited to the rental market, her office also mentioned RealPage by name in the press release.
Status of Defensive Suits
Meanwhile, RealPage’s suite of RMS products continues to be the subject of dozens of lawsuits across the country. One of the first suits filed against RealPage was filed in the Southern District of California by a group of renters accusing RealPage and several major landlords of conspiracy to raise and fix the price of rent for apartments nationwide, Bason v. RealPage, Inc, 22-cv-1611 (S.D. Cal.) Bason was dismissed shortly after filing, but the flood of litigation for RealPage had just begun.
In Re RealPage, Inc., Rental Software Antitrust Litigation (No. II)
In April 2023, the panel on multidistrict litigation issued an order consolidating and transferring several dozen cases in which plaintiffs alleged that RealPage and property owners and managers (“Lessors”) colluded to fix, raise, maintain, and stabilize prices through the employment of RealPage’s AIRM software in violation of federal and state antitrust law. The cases were transferred to the Middle District of Tennessee and consolidated before Judge Waverly Crenshaw, under the case caption In Re RealPage, Inc., Rental Software Antitrust Litigation (No. II), Case No. 3:23-md-3071 (M.D. Tenn.).
The MDL initially covered two categories of plaintiffs: those alleging illegal conduct in the multifamily housing market (the “Multifamily Plaintiffs”) and those alleging illegal conduct in the student housing market (the “Student Plaintiffs”). Both sets of plaintiffs alleged in their complaints that the respective rental housing markets were impacted by a price-fixing conspiracy in which the Lessors’ pricing and supply data was collected by RMS, which then used an algorithm to provide price recommendations for individual rental units and took steps to dissuade Lessors from diverging from those recommendations. Plaintiffs’ claims were brought under Section 1 of the Sherman Act.
In December 2023, Judge Crenshaw denied the motion to dismiss the second amended Multifamily Plaintiffs’ Complaint but granted the motion to dismiss the second amended Student Plaintiffs’ Complaint. As previously discussed on this blog, the DOJ filed a statement of interest in the case in support of plaintiffs, taking the position that price fixing via algorithm was prohibited by the per se rule against price fixing generally, and applied in the case. However, for at least the motion to dismiss stage, neither complaint’s theory received per se treatment, as the court found there were no allegations of direct agreement or communications, or of absolute delegation of price-setting functions. The judge instead applied a rule-of-reason analysis, under which the Multifamily Plaintiffs plausibly alleged the existence of a relevant market and anticompetitive effects in that market. Student Plaintiffs, on the other hand, failed to identify plausible geographic markets or the demonstration of market power in the proposed regional submarkets, and had no direct evidence of anticompetitive effects, resulting in the dismissal of their complaint.
Defendants Apartment Income REIT and Pinnacle Property Management Services LLC settled in February 2025. The case is otherwise ongoing.
U.S. v. RealPage, Inc.
In August 2024, the Antitrust Division of the Department of Justice (“DOJ”), along with North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, brought suit against RealPage in relation to its YieldStar and AIRM products. The DOJ complaint alleged violations of Sections 1 and 2 of the Sherman Act, as well as the laws of the states joining the action, based on what the complaint characterized as unlawful information-sharing and an illegal monopoly in the commercial revenue management software market.
In January 2025, the DOJ and several states filed an amended complaint against RealPage, adding as defendants seven rental companies. The amended complaint also added Illinois and Massachusetts as plaintiffs. While the primary theory remained unchanged, the amended complaint included new allegations regarding the exchange of competitively sensitive information.
On the same day the amended complaint was filed, the DOJ jointly entered a proposed final judgment with and against Cortland, one of the new defendants. On April 10, 2025, defendant Cortland also settled with the states of North Carolina and Colorado, agreeing to stop using non-public data from other landlords either through RealPage or other means to set rent but admitting no liability. California, Connecticut, Minnesota, Oregon, Tennessee, and Washington have also agreed to the settlement. The remaining defendants filed motions to dismiss on April 10, 2025.
Separate State AG Complaints
Prior to the DOJ action, the DC Attorney General filed suit against RealPage and 14 rental and property management companies in November 2023, alleging violation of the D.C. Antitrust Act. The DC AG Complaint claimed that the agreements between the defendant landlords and RealPage as well as among the defendant landlords to use RealPage’s revenue management software, exchange non-public information with competitors, and delegate rent-setting responsibility were illegal restraints of trade. The conduct, the DC AG alleged, was unlawful per se as well as under the rule of reason, and limited competition in the multifamily housing market. An amended complaint was filed in January 2025, and the case is ongoing.
Other states have also chosen to strike out on their own rather than joining the DOJ suit:
- The Arizona Attorney General filed a similar suit to DC’s against RealPage and landlords in February 2024. She noted at the time of filing that she filed the suit separately from the DOJ in case the DOJ were to drop the suit, and sent a letter to U.S. Attorney General Pam Bondi urging her to continue the lawsuit in March 2025. On April 17, 2025, defendant Apartment Management Consultants, LLC was dismissed by stipulation without prejudice.
- On January 15, 2025, the Maryland Attorney General filed suit against RealPage and six landlords, bringing claims under the Maryland Antitrust Act.
- The Washington state Attorney General Nick Brown withdrew Washington from the DOJ suit in February 2025, stating publicly that he believed state law protected more Washingtonians than the federal case. On April 3, 2025, his office filed suit in Washington state court against RealPage and several landlords alleging conspiracy and unfair competition violations under state law.
- New Jersey Attorney General Matthew J. Platkin announced that his office filed a lawsuit against RealPage and ten New Jersey landlords alleging violations of the Sherman Act, New Jersey Antitrust Act, and New Jersey Consumer Fraud Act on April 23, 2025. Jeremy Hollander, Acting Director of the Division of Consumer Affairs in the NJ AG’s office, said in the press release that defendants “conspired to replace normal market forces with pricing software designed to drive rents to levels that exceed what would prevail in a competitive market.”
Conclusion
RealPage continues to vigorously defend itself in federal and state litigation, and has also created a website that purports to rebut “false and misleading claims about RealPage and its revenue management software.” On the other hand, several rental and management companies appear to have less of an appetite for litigation based on settlements across the various cases. And both state and federal judges may have guidance from the Ninth Circuit on the use of pricing algorithms to set prices in the near future; Gibson v. Cendyn Group LLC, Case No. 24-3576 (9th Cir.), a hotel algorithmic pricing case dismissed in the lower court, is scheduled for argument on appeal on May 12, 2025.
