After years of scrutiny, RealPage has agreed to modify its rent-setting software, marking a significant change in how landlords operate in rental markets. This settlement with the U.S. Department of Justice (DOJ) will result in the removal of certain software features that allegedly allowed landlords to align rent prices and indirectly limit competition. For tenants, this may be a step toward more affordable housing options, but for landlords, it raises questions about how they will adapt to this shift.
As a female founder and entrepreneur who has navigated competitive markets with limited resources, I see this as a moment ripe with lessons for entrepreneurial women, particularly in Europe. The intersection of technology and ethical business practices is a space we cannot afford to ignore.
What Happened with RealPage?
RealPage’s software previously allowed landlords to track and share sensitive pricing data, as alleged by the DOJ. The company collected and analyzed private information such as current rent prices, occupancy levels, and lease terms from landlords and then used these data points to suggest rent price increases. According to the DOJ, this practice fostered a kind of algorithmic rent collusion, as it allowed landlords to synchronize their rent increases and maximize profits at the expense of tenants.
Here’s what the settlement entails, as per Ars Technica's detailed reporting:
- The software will no longer utilize non-public and sensitive data from competing landlords.
- RealPage must eliminate features that limit rent decreases or push aligned pricing strategies.
- The company can no longer use active lease data to train algorithms, which will now rely only on data at least 12 months old.
- RealPage has agreed to three years of external monitoring to ensure compliance.
The ultimate goal from a legal standpoint is to restore competition in rental markets. But for business leaders, this settlement offers deeper insights into ethics, compliance, and adapting to challenges.
Lessons Female Entrepreneurs Can Learn from RealPage’s Case
1. Transparency Is Non-Negotiable
RealPage fell into hot water for allegedly enabling landlords to manipulate rents through non-transparent practices. For women entrepreneurs in Europe thinking about scaling their startups, this is key: transparency isn’t a luxury. It’s a core tenet that not only protects your brand but also strengthens trust with your consumers. If your business model relies on data, make sure your practices comply with ethical guidelines and legal frameworks.
2. Your Competitive Advantages Shouldn't Come at the Expense of Others
RealPage provided tools that maximized landlord profits at the expense of renters. When you're building your unique selling point, it's worth asking yourself: does this solve a real problem, or does it merely exploit a gap? European markets are increasingly holding businesses accountable for the societal impacts they create.
3. Technology Must Serve, Not Exploit
As an entrepreneur who builds solutions at the intersection of game design and AI, I strongly advocate for adopting technologies that bring value to stakeholders without crossing ethical lines. RealPage's algorithm-assisted rent pricing raised legitimate concerns about misuse of AI. For founders, this example underscores the importance of aligning products with ethical tech principles.
Statistics that Matter for European Entrepreneurs
- A 2024 report on rental trends by ProPublica noted that RealPage adoption led to rent increases of up to 14.5% in certain U.S. cities. Could such a tool proliferate in Europe? Likely not, given stronger tenant protection laws. But the scrutiny on pricing algorithms is highly relevant for startups leveraging AI.
- According to Eurostat, 25% of Europeans live in rented accommodation, and rent affordability is a growing issue in cities like Amsterdam, Paris, and Berlin. Startups targeting these regions need to strike a fine balance between profitability and consumer fairness.
- The European Union's Digital Services Act, effective as of 2024, puts more pressure on companies to adhere to transparency and ethical usage of algorithms, making compliance an essential consideration in your business planning.
How to Build Ethical Algorithms for Your Business
If you’re in tech and rely on data-driven models, building ethical frameworks upfront is crucial. Here’s a quick guide to help you stay compliant and fair:
- Conduct Regular Audits: Ensure your algorithms don’t disadvantage any group unfairly. Hire a third party if budget allows.
- Data Governance: Only use data collected ethically and within the legal guidelines of your operating markets.
- Transparency: If your tool makes recommendations or decisions, users should understand how those outcomes were reached.
- Build Feedback Loops: Allow end-users to voice concerns and provide input, ensuring the system continues to serve its intended purpose.
Common Mistakes to Avoid as a Startup Founder in Europe
- Ignoring Compliance Regulations: With GDPR and emerging AI legislation, Europe has tight rules around data usage and automated decision-making. Avoid shortcuts that could lead to penalties.
- Over-Automating Without Checks: Algorithms are tools, not decision-makers. Human oversight is essential to guarantee fairness.
- Hiring for Speed, Not Expertise: When in a tech crunch, startups often prioritize fast development over hiring the right cultural and ethical talent. Long-term, this leads to costly mistakes.
Lessons from My Own Journey
Creating ethical frameworks isn’t a theoretical exercise. When I built Fe/male Switch, an incubator aimed at empowering women in STEM, I made a deliberate choice to craft algorithms that prioritize user growth over monetization. For example, our AI-powered tools focus on delivering actionable learning rather than overwhelming users with unnecessary complexities. The key lesson: always build with people, not profits, as your primary focus.
Conclusion
For female founders in Europe, the RealPage story isn't just a legal case. It’s a reminder to build startups that balance innovation with integrity. The rental market may not be your industry, but the principles, data transparency, ethical AI, and compliance, apply universally. Embracing these values isn't just the right thing to do; it’s also good business, especially in Europe’s socially conscious markets.
Stay ahead by investing in compliance, fostering innovation responsibly, and putting long-term value over quick wins. Your customers, employees, and the market will notice.
FAQ
1. What changes did RealPage agree to make under the settlement?
RealPage will no longer use non-public, competitively sensitive data to set rent prices, will stop using active lease data to train algorithms, and must eliminate features that limit price decreases or align landlord pricing. Additionally, features fostering rent collusion between landlords must be redesigned or removed. Learn more about the RealPage settlement
2. How did the DOJ define the antitrust concerns with RealPage?
The DOJ claimed RealPage’s algorithms and data-sharing allowed landlords to use sensitive pricing information to align rent increases, limiting competition in the rental market. Check out the DOJ's complaint
3. What impact did RealPage’s algorithms have on rental prices?
Investigations found RealPage’s tools contributed to rent increases, with landlords reportedly adopting the software to push rents up. For instance, ProPublica reported rent hikes of up to 14.5% in certain U.S. cities. Explore ProPublica's investigation
4. How does this case relate to the concept of algorithmic collusion?
Algorithmic collusion occurs when software systems, like RealPage’s, use shared data to suggest aligned pricing actions among competitors, reducing true market competition. Learn more about RealPage's algorithmic practices
5. Will other companies face consequences for using RealPage?
Yes, property management firms using RealPage’s features, like Greystar, face their own lawsuits, with some already settling for millions. Read about the settlements
6. What compliance measures must RealPage now implement?
RealPage must undergo three years of external monitoring, appoint an antitrust compliance officer, and design safeguards to prevent future issues. Learn about RealPage’s compliance steps
7. How does this settlement affect renters in the U.S.?
The settlement aims to restore competition in the housing market, potentially slowing rent increases and creating more affordable rental options. Check out how this impacts renters
8. What lessons can female entrepreneurs take from this case?
Ethics in data-driven models and ensuring transparency in operations are vital lessons. Products must add value, not exploit gaps, aligning with ethical AI principles. Explore female entrepreneurs' takeaways
9. How does Europe’s regulatory landscape differ for such technologies?
Stronger tenant protections and the EU’s Digital Services Act, effective 2024, enforce strict transparency and ethical AI usage, reducing the possibility of similar cases. Read more about EU regulations
10. Are there broader implications for algorithmic pricing in other industries?
This case highlights increasing scrutiny on price-setting algorithms across industries, likely influencing how companies in finance, travel, and retail approach pricing AI. Check out insights into algorithmic pricing
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.