On August 23, the DOJ’s Antitrust Division
announced that, with eight states, it
filed suit against a commercial real estate management software company, alleging antitrust violations. The complaint, filed in the Middle District of North Carolina, alleges four Sherman Act violations: (i) unlawfully sharing information for use in competitors’ pricing; (ii) vertical agreements with landlords to align pricing; (iii) monopolization of the commercial revenue management software market; and (iv) in the alternative, attempted monopolization of the commercial revenue management software market. North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee and Washington joined the DOJ as plaintiffs in this civil antitrust suit.
In general, the complaint alleged the defendant facilitated price- and term-coordination among landlords. The defendant’s software prompted landlords to enter nonpublic data, such as transaction-level lease pricing and terms. Then, the defendant’s software feeds this data into the defendant’s proprietary algorithm. The algorithm, in turn, recommended optimized lease pricing and terms to landlords based on market, unit characteristics and other factors. The complaint alleged that the defendant’s receipt of nonpublic information, and use of this information to generate pricing recommendations, on a market-dominant platform, constituted both an unlawful sharing of price information and a vertical agreement with landlords to align pricing. In addition, the complaint alleged that defendant’s market-dominant position — controlling eighty percent of the commercial revenue management software market — constituted an illegal monopoly.
To remedy these violations, plaintiffs will seek declaratory and injunctive relief, along with any other relief necessary to restore competitive conditions in the markets impacted by the defendant’s conduct.
