US DOJ Settles with Greystar Over AI-Driven Rent Price Collusion
The US Department of Justice reached a tentative settlement with Greystar Management Services, the nation's largest landlord, over allegations that Greystar and other landlords used RealPage's algorithmic pricing software to coordinate rent increases. The settlement bars Greystar from using anticompetitive algorithms and sharing competitive data with rivals, and requires court monitoring of any future third-party pricing algorithm use.
What happened
Greystar Management Services LLC, the largest landlord in the US managing almost 950,000 rental units, reached a tentative settlement with the US Department of Justice in an antitrust lawsuit. The DOJ accused Greystar and other landlords of colluding to increase rents across the US in part through RealPage's widely used industry software.
According to the DOJ complaint, Greystar and other landlords shared competitively sensitive data to generate pricing recommendations using RealPage's algorithms, which included anticompetitive rules that aligned competitors' pricing. Greystar and other landlords also discussed competitive pricing strategies, rents, and selected parameters for RealPage's software directly with each other.
Reported impact
The settlement was filed as part of the DOJ's ongoing enforcement against algorithmic coordination and anticompetitive practices in rental markets across the country, indicating widespread market impact from the alleged conduct.
Index analysis
The case demonstrates how algorithmic pricing tools combined with data sharing between competitors can facilitate price collusion, raising questions about the appropriate governance and oversight of AI systems used in markets with significant consumer impact.
Governance controls
The proposed consent decree requires Greystar to refrain from using any anticompetitive algorithm that generates pricing recommendations using competitors' competitively sensitive data or incorporates certain anticompetitive features, and to refrain from sharing competitively sensitive information with competitors.
Greystar must accept a court-appointed monitor if it uses a third-party pricing algorithm that is not certified according to the consent decree terms, refrain from attending or participating in RealPage-hosted meetings of competing landlords, and cooperate with the DOJ's monopolization claims against RealPage.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.