Thoma Bravo’s RealPage Sued by Department of Justice for Price Fixing

RealPage is now officially the subject of a lawsuit by the United States Department of Justice and eight state Attorneys General which alleges that RealPage works with competing landlords to share sensitive information about potential and current tenants. The DOJ alleges that this information-sharing eliminates competition between landlords, and allows RealPage to maintain a monopoly within the housing management software market. In a press release about the suit, the DOJ states that “RealPage’s alleged conduct deprives renters of the benefits of competition on apartment leasing terms and harms millions of Americans.” More than 30 US public employee pension funds have invested a total of over $6 billion in Thoma Bravo’s Funds XIII and XIV, the funds that acquired RealPage in 2021. 

Since a 2022 expose by ProPublica about the software’s impact on the housing market, RealPage has been sued in numerous class action lawsuits and by two state attorneys general. The allegations against RealPage have dominated the news, and led to a large amount of fallout including a June FBI raid on Cortland Management, a real estate apartment management company that utilizes the software. 

The Department of Justice lawsuit, which was announced on August 23, alleges that “RealPage contracts with competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates and other lease terms to train and run RealPage’s algorithmic pricing software.” Filed in the Middle District of North Carolina, the lawsuit also alleges that RealPage violated Sections 1 and 2 of the Sherman Act,an antitrust law which promotes competition within the United States financial market, and gives the Department of Justice the authority to intervene within the commerce sphere to prevent unfair monopolies. 

In an interview with reporters about the lawsuit, Attorney General Merrick Garland stated“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.” Presidential candidate Kamala Harris has also mentioned tackling price-fixing by pledging to crack down on corporate landlords. While the White House has yet to release an official statement on the lawsuit, according to White House National Economic Advisor Lael Brainard, Biden’s 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.”

According to Curbed Magazine, “the implications of the Justice Department’s suit could be enormous,” due to the software’s control of the housing markets, with some experts saying that RealPage controls 80% of the United States market share for rental software. The DOJ’s suit, along with the numerous lawsuits across the country, plus over two years of negative press about RealPage, creates the conditions for reputational and financial risk for pension funds invested in Thoma Bravo.