This is really good news. A recent ProPublica story identified RealPage as a major factor in rising rents across the country, and now D.C.'s attorney general, Brian Schwalb, appears to be building a national antitrust suit against them. Via the Washington City Paper:
Schwalb’s office sent a proposed contract with the firm Cohen Milstein Sellers & Toll PLLC to the D.C. Council for approval late last month, specifying in a memo to lawmakers that it hoped to work with the attorneys on the “investigation of and potential litigation against identified targets in the housing industry for violations of antitrust laws.” The name of those potential targets is redacted in versions of the contract shared publicly ahead of the Council’s planned vote on the deal Tuesday.
However, the source familiar with the investigation tells Loose Lips that Schwalb is scrutinizing RealPage, a Texas-based company that works with major commercial property managers across the country. The firm primarily sells access to its “YieldStar” software, which recommends rent prices for apartments by using a proprietary algorithm to calculate what the market will bear. That algorithm is based on pricing data from its own clients, prompting some experts to speculate that the company effectively provides a way for big landlords to collude and fix prices.
RealPage is currently facing more than a dozen lawsuits from renters accusing it of antitrust violations alongside many of its clients. The Department of Justice has also opened an antitrust investigation into the firm. State attorneys general have yet to challenge the company in court, meaning Schwalb could be among the first to do so. (The proposed contract with Cohen Milstein also suggests the possibility that a future lawsuit could involve multiple states teaming up against the company—a common practice in such consumer protection and antitrust cases.)
Matt Stoller has written about RealPage in Big, his antimonopoly newsletter, but also companies like Agra Stats, which has been used not only to drive up the price of pork, poultry, and turkey, but to fix prices across the country. Stoller points to these services as a likely factor in inflation.
A couple of antitrust cases over the last month are suggesting that concentration may have played a more significant role than commonly understood, but we just don’t have the data to measure it. Two weeks ago, the Antitrust Division filed a complaint against a firm called Agri Stats, which sells data and consulting services to the processors that dominate the poultry, pork, and turkey industry.
The claim in the case is that Agri Stats was a coordinator of pricing, serving as a clearinghouse where it would collect and share granular pricing, wage and production data for all major meatpackers. Agri Stats also sold consulting services, which one executive at Smithfield, a pork processor, summarized with four words: “Just raise your price.”
The poultry, pork, and turkey industries aren’t technically monopolies, as there are multiple firms who sell these products. But Agri Stats, by making sure everyone in the industry colludes, applied a form of unified control of pricing to the industry. It’s multiple firms, but in one centralized cartel.
And that unified control provides cover for individual companies. That's why these anti-trust suits are good news for consumers.
