By Tara Pincock, Policy Counsel at Open Markets Institute

Let’s begin with a basic principle under the antitrust laws: Businesses are required to make pricing decisions independently. Coordinating with competitors or using a third-party intermediary to fix prices is against the law. Likewise, sharing nonpublic information with competitors is not allowed because doing so is against the law. But the DOJ’s proposed settlement with software developer RealPage makes it abundantly clear that even when large corporations are caught with their hand in the cookie jar, they will face few consequences on the federal level.

In their amended complaint, the DOJ and ten states accused RealPage and seven landlords of conspiring to increase rental prices by using “nonpublic, material, and granular rental data” from competitors, which was fed into RealPage’s algorithm. The algorithm then spat out pricing recommendations that pushed rents higher and higher across the country. Rental prices went up approximately 35% between 2019 and 2024. According to one analysis, renters paid an additional $3.8 billion in 2023 alone. While there are likely multiple factors responsible for the increase, at least some of the blame must be laid at the conspirators’ feet. But despite the massive public interest in lowering the cost of living, the DOJ’s settlement does little to address it.

Pursuant to the settlement, RealPage will pay no fines and pay no restitution to the millions of renters who saw their rent go through the roof. Two of the seven landlords have previously settled with the DOJ with similar terms. To be clear, RealPage and the two landlords have disclaimed any wrongdoing and maintain that their business practices are legal. Even so, RealPage must change its business practice to stop feeding competitors’ nonpublic, competitively sensitive information into its algorithm.

On one hand, this settlement is a win because it could help restore competition in the rental market. If landlords can no longer use a third party (i.e., RealPage) to coordinate prices, they might have to start competing with each other. Theoretically, they could compete for renters by offering better prices than the competition.

On the other hand, this settlement will have little to no deterrent effect on the next software company that engages in the similar conduct. As I’ve written before, people aren’t dissuaded from committing criminal acts by threats of punishment but instead are deterred by the likelihood of getting caught. The more likely you are to get caught, the less likely you are to commit the crime. Nevertheless, there must be consequences if you are caught, and the punishment must sting. Keep in mind that corporations can face up to $100 million in fines if they are found criminally liable for participating in a price-fixing conspiracy. Individuals can face up to 10 years in prison and $1 million in fines.

But here, in a conspiracy that spread across the country and allegedly cost renters billions per year, three of the eight named defendants were let off the hook with less than a slap on the wrist. They are only required to stop doing what they shouldn’t have been doing in the first place.

All is not lost, however. The settlement is between the DOJ and RealPage only. It is highly likely that the ten plaintiff states in this case are currently in settlement discussions with RealPage and the remaining defendant landlords. The states have the opportunity to send a clear and strong message that this type of conduct will not be tolerated and those who are caught breaking the law will face painful consequences. Perhaps they should demand partial disgorgement of the ill-gotten gains. That would make the next guy think twice before entering into a price-fixing conspiracy.