A consolidated class action complaint filed in the U.S. District Court for the Western District of Washington accuses Yardi Systems, Inc., a leading property management software provider, and dozens of major multifamily housing landlords of orchestrating a nationwide price-fixing conspiracy that has allegedly inflated rental prices for millions of Americans. The suit, brought by named plaintiffs McKenna Duffy and Michael Brett, seeks treble damages and injunctive relief under Section 1 of the Sherman Act (In Re Yardi Revenue Management Antitrust Litigation, No. 2:23-cv-01391-RSL, W.D. Wash.).
The complaint alleges that Yardi’s RENTmaximizer software, now rebranded as Revenue IQ, serves as the hub of a “hub-and-spoke” conspiracy, enabling landlords to outsource rental pricing decisions to a centralized algorithm. According to the plaintiffs, the software uses confidential data from landlords and competitor pricing information to recommend rental rates that are artificially inflated, eliminating traditional market competition and driving up rents across the multifamily housing market.
Key Allegations
The complaint asserts that Yardi and its landlord clients have engaged in anticompetitive practices by:
Sharing Competitively Sensitive Data
Landlords allegedly provide Yardi with detailed pricing and occupancy data, which is aggregated and used to generate rent recommendations for competitors.
Coordinating Pricing
RENTmaximizer reportedly automates rental pricing decisions, allowing landlords to collectively adopt higher prices without direct communication.
Manipulating the Market
Economic analysis cited in the complaint found that properties using RENTmaximizer charged rents approximately 6% higher than comparable properties not using the software.
Eliminating Discounts
Yardi’s marketing materials and client testimonials allegedly boast about the software’s ability to eliminate concessions and specials, further suppressing competition. The plaintiffs argue that this conduct constitutes a per se violation of antitrust law, or alternatively, violates the Sherman Act under a “quick look” or “rule of reason” analysis. The complaint cites the lack of procompetitive benefits, asserting that the scheme has primarily benefited landlords and Yardi at the expense of renters.
Scope and Relief
The complaint identifies multiple metropolitan statistical areas (MSAs) as relevant submarkets, including Seattle, Atlanta, Los Angeles, and Chicago, among others. Plaintiffs seek to represent a nationwide class of renters who leased multifamily housing units from landlords using Yardi’s RENTmaximizer or Revenue IQ software between September 8, 2019, and the present.
The plaintiffs demand treble damages for overcharges incurred by renters; injunctive relief to prohibit the continued use of RENTmaximizer and similar pricing algorithms; and attorneys’ fees and costs.
Implications
The suit comes amid growing scrutiny of algorithmic pricing in the real estate sector. The Department of Justice is reportedly investigating similar practices by Yardi’s competitor, RealPage, whose YieldStar software has been accused of facilitating collusion among landlords. The DOJ recently filed a notice in the RealPage litigation, emphasizing the increasing significance of algorithmic pricing in antitrust enforcement. Professionals in the real estate and legal sectors are monitoring this litigation, as its outcome could impact pricing strategies, data-sharing practices, and antitrust compliance in the multifamily housing industry.