In a substantial move against what it deems an unlawful attempt to sidestep fair rental competition, the Justice Department has initiated a lawsuit against the Texas-based property management software company RealPage Inc. This legal action, which also involves Attorneys General from several states including California, targets the company's use of algorithmic pricing tools which, officials claim, harm renters across America by artificially inflating rental prices. The federal lawsuit, filed in the U.S. District Court for the Middle District of North Carolina, accuses RealPage of infringing Sections 1 and 2 of the Sherman Act.

At the heart of the issue is RealPage's pricing software, which reportedly consolidates sensitive rental rate information from different landlords to prescribe rental pricing, according to the Justice Department's allegations, "RealPage's pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents." Attorney General Merrick B. Garland portended a stark truth, saying, "Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law."

This alleged practice conflicts with a competitive marketplace where landlords would typically vie for tenants by offering competitive pricing and terms. Furthermore, the complaint highlights internal communications and testimony from RealPage and landlords, which underscore the intent to use this informational convergence to boost profitability. 

Aside from prompting the collusion between landlords, the government contends that RealPage has used this strategic data exchange to perpetuate its dominance in the commercial revenue management software sector, with an estimated 80% market share, according to the Justice Department. 

Attorney General Jonathan Kanter of the Justice Department's Antitrust Division expressed the urgency of the matter, clarifying the government's stance: competition – not RealPage – should determine what Americans pay to rent their homes. With the legal process now in motion, all eyes will be on the unfolding courtroom drama that could reshape the way rental prices are set in the United States.