Whenever a new administration comes in, much of the focus is on changes in leadership, governing philosophy and policy priorities. What doesn’t change is the interest everyone has in positioning the government to protect consumers. It’s a bipartisan responsibility, and with it comes the need for public trust, ensuring citizens have confidence that leaders are safeguarding consumer transactions and engagements, and not using the levers of power to make accusations or affronts that may be intended to serve ulterior motives.

One puzzling application of the Department of Justice’s authority, U.S. v. RealPage Inc., filed by the DOJ on August 23 in the U.S. District Court for the Middle District of North Carolina, alleges that the company has conspired to fix above-market rental prices for the average American tenant via its algorithmic software.

Based on my time as attorney general of Maine, I observe several shortcomings in the DOJ’s case. First, an agreement to fix prices requires pacts among participating entities to act anti-competitively. In amending its case, the DOJ attempted to paint routine processes and interactions, such as participation in industry networking events, as pervasive conspiracy. Apparently, the strategy is to link the software with separate, age-old norms appearing in nearly every industry. But where and how do definitive market limits exist, if they exist at all?

It’s an especially important consideration for an industry featuring scores of housing providers with many differentiating factors that may appeal to different segments of consumers on a fluctuating basis. Realistically, for predatory market containment to be validated, property lessors would need to establish formal accords with commonly identifiable parameters among each participant on a separate, individual basis, and be bound as such under an enforceable framework that eliminates any form of deviation from all other respective players.

While these mechanics of market binding on the part of RealPage were not demonstrated in the DOJ’s first filing, it certainly does not suffice to simply supply anecdotal notes on a limited number of interactions between property managers, as does the agency’s subsequent filing on January 7. It’s highly probably that interactions serve as a means of posturing among peers to support highly nuanced competitive dynamics in which managers pursue multi-step decision-making to outsmart and outperform the broader landscape. 

Market fundamentals reinforce the concept that competitors, at any given time of perceived price stabilization, may undercut their rivals in order to achieve transitory gains. Such an uptick in customer acquisition (and largely at rivals’ expense) is unlikely to have occurred to the same extent in the absence of strategically timed choices. An illustration of market functions can be gleaned from the fact that users of RealPage’s data tools have accepted price recommendations less than half the time.

Regulators would like to think that RealPage’s price suggestions are rate mandates, but they are not. The software’s rent recommendations speak to purely hypothetical price status at a given point in time, demonstrating that there is no basis to even possibly affirm RealPage as a comprehensive convener of the market. The company provides one of many revenue management models used by landlords, and fewer than 10 percent of all rental housing units in the U.S. use its software. It is absurd to declare that the company affects a majority share of rental housing and possesses the elaborate interconnected ties necessary to bind separate entities on uniformly elevated prices.

Given existing competition statutes, it is hard to envision how the DOJ’s case against RealPage could proceed to a need for substantive remedy, nor justify the continued use of valuable agency resources. In reality, the maneuver seems to place emphasis on presenting an attention-grabbing narrative, while allowing the assembly of critical facts to play second fiddle. The Department’s amended complaint redirects focus and adds several of the software company’s property management customers as defendants, making it clear that litigation against the data analytics tool is unsubstantiated.

The nation’s housing affordability problems – and drastic shortage of homes – have been well-known for years. Contorting the law regarding rental market evaluation is an unsatisfactory substitute for meaningful policy changes that prioritize increasing America’s supply of housing. 

The damage of inviting additional specious claims against technological advancements may have already been done, but there is still time to regain Americans’ confidence in government. The Department of Justice should cease the unfounded RealPage inquiry and instead focus on investigations into actual instances of consumer deception and harm.