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What happened: Greyster, the nation’s largest landlord, agreed to stop using the rental configuration software, an algorithm that federal prosecutors say could violate the law against price fixing.
The agreement is part of a proposed settlement with the Department of Justice, part of the Department of Justice, to settle claims by federal authorities that the company conspired with other landlords to raise rents in cities across the country.
The agreement was announced by the DOJ on Friday, but still must be approved by a judge. If so, the department said in a statement as it bans Greyster, which is based in South Carolina and manages around 950,000 apartments nationwide, and uses an “anti-competitive” algorithm that relies on sensitive data from rivals to propose rents.
Greyster used the rent setting algorithm from Realpage, a Texas-based software manufacturer that was targeted for the 2022 PropoPublica survey. DOJ also sued the real page.
What they said: The reconciliation attracted praise from both Republicans and Democrats.
The lawsuit began under the Biden administration, but Trump-appointed Attorney General Pam Bondy promoted an agreement with Greyster last week, saying “competition is less important than making homes affordable again.”
“It cannot be a smokey room or through algorithms, competitors can’t share competitive, sensitive information or put American consumers at a disadvantage,” said Abigail Slater, head of DOJ’s antitrust department.
The settlement was praised by Sen. Amy Klobuchar, a Minnesota Democrat who urged the DOJ to investigate anti-competitive practices in the apartment market after the 2022 Propovica story.
“This settlement is good news for renters across the country,” Klobuchar said in a statement. “It is important that the Department of Justice continues to prosecute cases against Realpage and other major landlords in order to provide relief to all tenants.”
Answer: Greyster did not acknowledge any fraudulent activities as part of the settlement and said in a statement that he “believes that the use of Realpage’s revenue management software is in compliance with all applicable laws.” The company said it will continue to defend against claims brought by regulators, citing what it calls “unclear regulatory guidance on the use of revenue management tools.”
“We went into these settlements and made clear how the government’s interpretations of laws and made sure that things continue in the right way,” Greyster said.
Greyster also announced that a “consensus in principle” has been reached to resolve the lawsuit filed by a national group of tenants making similar claims.
A Greyster spokesman declined to comment further.
Realpage declined to comment.
In January, a RealPage executive called the federal incident “a flaw” and said the company had pledged to “a fierce defense of itself.” Realpage had already changed its software to remove private data, she added that despite its view that the technology is legal and “competitive”, it has become a scapegoat for housing affordability issues caused by downstream housing stocks.
Background: The proposed settlement is the latest development following Propublica’s 2022 survey, and also mentions Greystar. Dozens of tenants sued the real page after the first story. The Justice Department filed an antitrust complaint against Real Page in August 2024, suing six landlords, including Greyster in January, accusing them of inappropriately working to raise rents. In their complaints, prosecutors told Realpage that a landlord began rent growth within a week of adopting the software, raising its 25% or more within 11 months.
The lawsuit was joined by at least 10 attorneys, including the attorney general of California, the country’s most populous state. Another landlord, Atlanta-based Cortland, also agreed to the settlement.
The senators also held hearings and introduced legislation attempting to ban the use of rent algorithms similar to Realpage. Cities across the country, including San Francisco, Philadelphia and Minneapolis, have moved to bar landlords from setting rent using similar algorithms.
Under the terms of the proposed settlement, Greyster agreed to cease sharing his own “competitive” information with his rival companies. Also, you will not attend competitor meetings hosted by Realpage.
Why it matters: The DOJ’s move towards Realpage and its landlord’s clients to use shared data and technology showed that authorities were willing to walk to the incredible corner of federal antitrust laws. In the past, the conspiracy took place in “formal handshakes at secret meetings,” federal prosecutors wrote in one submission. “Algorithms are a new frontier.”
The proposed settlement is also important, as companies look to see how the Trump administration actively pursues antitrust cases. Bondi said the agreement coincides with the president’s “consumer agenda.”
Currently, as part of the agreement, Greyster agrees to cooperate with DOJ’s exclusive claims against Realpage. The case is in progress. Realpage attempted to dismiss the lawsuit, saying it “cannot sue anti-competitive effects in related markets.”
Read the original report
Will the rent go up? One company’s algorithm could be the reason for this.
According to the lawsuit
The Department of Justice sues six of the nation’s largest landowners to stop suspected price lockdowns in the rental market
Mariam Elba contributed to his research.
