And the Justice Department, beyond its brief in the tenants’ litigation, has signaled broader scrutiny of big landlords. In May, the Federal Bureau of Investigation executed a limited search warrant at the Atlanta headquarters of the real estate management firm Cortland in connection with a Justice Department investigation into potential antitrust violations in the multifamily housing industry.
“We are cooperating fully with that investigation, and we understand that neither Cortland nor any of our employees are ‘targets’ of that investigation,” the company said. Cortland is a defendant in the tenants’ litigation, but it is unclear how the RealPage software is factoring into the federal inquiry, if at all.
A Justice Department representative declined to comment.
The government has a legal advantage over private attorneys in that it can use civil investigative demands to “pop open the hood” of RealPage’s software, analyzing how its algorithm works before going to court, said Sandeep Vaheesan, legal director at the Open Markets Institute, a research and advocacy group focused on antitrust issues.
Ms. Bowcock, RealPage’s spokeswoman, said property managers “find value” in its software. But there are signs that some customers are starting to worry about the legal threats. In February, Pinnacle and one other multifamily residential property owner, listed as defendants in the Tennessee federal court litigation, agreed to settle claims in that lawsuit that they inflated rental prices using RealPage’s software.
Although a federal judge in Tennessee let the tenants’ litigation move forward, none of the pending lawsuits has gone to trial. To prevail, they will need to present sufficient evidence of collusion, by way of RealPage’s software, to convince the courts to see the information exchange as illegal.
Some antitrust lawyers say those facts need to be fleshed out and tested in court.
“We’re fighting on a hypothetical battlefield right now,” said Douglas Ross, who teaches antitrust law at the University of Washington.