Landlord Technology Company, RealPage, Files Lawsuit against University of California, Berkeley, over Prohibition of Automated Housing Pricing Methods
In the heart of California, a legal battle is unfolding between RealPage, a company offering landlords algorithmic rental pricing software, and the city of Berkeley. The dispute centres around whether RealPage's software constitutes illegal price-fixing or is protected as free speech.
The Department of Justice (DOJ) and several state attorneys general have filed lawsuits against RealPage, alleging that the software facilitates unlawful price-fixing by requiring landlords to share competitively sensitive data. This, they claim, leads to coordinated rent increases in violation of antitrust laws, specifically the Sherman Act.
Berkeley, in response, passed a city ordinance in 2025 aiming to prohibit such price coordination. RealPage, in turn, sued the city, arguing that its rent recommendations are merely "rental advice" and that banning them infringes on its First Amendment free speech rights. However, court complaints suggest that landlords overwhelmingly follow RealPage's price suggestions due to internal enforcement measures, indicating that the software's function extends beyond "advice" into de facto price-setting.
The Antitrust Perspective
From an antitrust perspective, RealPage's software allegedly enables landlords to share private pricing data and coordinate rent increases, which can be considered illegal price-fixing under the Sherman Act.
The Free Speech Claim
On the other hand, RealPage argues that banning its software suppresses protected speech because the software provides recommendations rather than direct price mandates.
The central legal question remains contested, with no definitive court ruling yet fully resolving whether RealPage's actions constitute anticompetitive behaviour or protected speech.
Market Dominance and Criticism
RealPage controls 80% of the market for commercial revenue management software, a fact that has not gone unnoticed. Critics contend that RealPage's practice of comparing rental prices to make a suggestion amounts to illegal price-fixing. Some lawmakers across the United States have even likened RealPage to a cartel.
The Berkeley Ban and Legal Challenges
In Berkeley, six major real estate firms named in lawsuits over RealPage's software own over 1,300 apartments. The ban on RealPage software in Berkeley is set to go into effect on April 24, but the company is seeking a temporary restraining order to block it. The city of Berkeley, California is being sued by RealPage over this ban.
RealPage argues that landlords accept its suggestions less than 50% of the time and believes the ban amounts to scapegoating. The company also states that the real issue is a severe lack of housing supply.
The Future of Rent Pricing in Berkeley
As the legal battle continues, the future of rent pricing in Berkeley remains uncertain. Proponents of the "abundance" or YIMBY movements argue that deregulation of the housing market will lead to lower rental prices. However, the Housing Advisory Commission in Berkeley found that deregulation could potentially allow for schemes like RealPage to flourish.
Meanwhile, developing new properties in states like California is a slow, arduous process, and new apartment buildings are frequently targeted by NIMBY types who use environmental laws to thwart any new development. These complexities add another layer to the ongoing debate about the role of technology in the housing market and the balance between competition, consumer protection, and free speech.
- If the court rules in favor of RealPage, it could set a precedent for tech companies in the future, potentially allowing them to share competitive data without fear of antitrust allegations, as the software provided by RealPage could be considered protected speech.
- Gizmodo, a popular tech news site, has covered the unfolding legal drama involving RealPage and Berkeley, shedding light on how the outcome could influence the technology industry's finances, particularly businesses relying on data sharing or algorithmic pricing models.
- As the finance community closely watches the future of rent pricing in Berkeley, investors may reassess their investments in tech companies targeting the housing market, given the potential risks associated with antitrust violations and the intricate balance between competition, consumer protection, and free speech.
