DOJ, 8 States File Antitrust Lawsuit Over High Rents

The Department of Justice and eight states filed an antitrust lawsuit against software firm RealPage on Friday, accusing the company of helping landlords collude to keep rents high.

In a civil complaint filed in U.S. District Court in North Carolina, the Justice Department claimed that RealPage "allows landlords to manipulate, distort, and subvert market forces."

"At bottom, RealPage is an algorithmic intermediary that collects, combines, and exploits landlords' competitively sensitive information," the suit said. "And in so doing, it enriches itself and compliant landlords at the expense of renters who pay inflated prices and honest businesses that would otherwise compete."

The lawsuit is reportedly the first time that the federal government has accused a company of using mathematical algorithms to systematically undermine the rules of free-market competition.

At a Friday morning press conference, Attorney General Merrick Garland said, "Everybody knows the rent is too damn high, and we allege this is one of the reasons why."

"Antitrust law does not become obsolete simply because competitors find new ways to unlawfully act in concert," Garland said. "And Americans should not have to pay more in rent simply because a company has found a new way to scheme with landlords to break the law."

The attorneys general of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington joined the government in its lawsuit.

According to Garland, the suit is the culmination of a nearly two-year-long investigation and comes as high housing and rental prices have emerged as a key issue in the final stretch of the race for the White House.

Democrat presidential nominee and Vice President Kamala Harris has said she aims to bring down rental costs in part by cracking down on the companies that create price-setting tools. A study by the nonpartisan Committee for a Responsible Federal Budget said last week that Harris' economic agenda would increase the federal deficit by $1.7 trillion over 10 years.

The White House declined to comment on the antitrust action against RealPage and provided a statement from national economic adviser Lael Brainard to CNBC instead.

Brainard said President Joe Biden and Vice President Kamala Harris "know that too many Americans feel squeezed by high rents."

"The Biden-Harris Administration has made clear that no one should pay higher prices because of corporate lawbreaking and continues to support fair and vigorous enforcement of the antitrust laws to prevent illegal collusion," she said.