Tennessee announced on Thursday that it received settlement money from a rent-pricing manipulation lawsuit.
The Volunteer State got $7 million from the settlement with LivCor, a Chicago-based real estate investing company, over allegations that the company used rent-pricing software, including RealPage products, and competitors’ confidential data to raise apartment rents.
Regulators alleged LivCor used RealPage software that contributed to higher rental prices by minimizing landlord competition.
In addition to Tennessee, California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, and Oregon also received money as part of the settlement.
The money these states are receiving from the settlement can go towards antitrust enforcement initiatives, consumer protection programs, litigation expenses, and attorney education and training.
According to the settlement, LivCor will not be allowed to use nonpublic rental data to determine rent recommendations, gather confidential pricing data for properties owned by others, or disclose nonpublic rental information to competitors.
On top of this, LivCor will need to stop using specific third-party rent-setting software within 30 days and move toward having new property acquisitions use new rental software.
The settlement says LivCor can use another company’s pricing software only if it does not use competitors’ confidential data, share confidential data with others, or apply pricing restrictions based on competitors’ nonpublic data.
LivCor can’t share information based on others’ confidential rental information, seek out its competitors’ nonpublic data, or use this data to set rental prices, the settlement says.
According to the settlement, LivCor does not admit any guilt or violation of the law, and the settlement will last for four years.
Tennessee Attorney General Jonathan Skrmetti said, “Tennessee renters deserve a housing market driven by competition—not by secret agreements and shady algorithms that raise prices for everyday families.”
“This settlement holds LivCor accountable and sends a clear message that companies doing business in Tennessee have to follow the law,” he said.
LivCor manages an estimated 1,200 apartments in Tennessee that used RealPage’s pricing software, according to the state attorney general’s press release.
In California, Attorney General Rob Bonta said tenants in the state “should not have to wonder whether the rent they are paying each month is the result of an unlawful scheme.”
“Families across the country are staring down a raging affordability crisis that is made worse when companies act illegally to line their own pockets,” he said.
Oregon’s attorney general, Dan Rayfield, said, “These companies used software to manipulate the rental market and keep prices climbing—and Oregon families paid the price.”
“Landlords don’t get to outsource collusion to an algorithm and call it business as usual,” he added.
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Zachery Schmidt is the digital editor of The Star News Network. Email tips to Zachery at [email protected].
