A federal court ruling blocking part of New York’s algorithmic rent-setting law has introduced a constitutional complication into efforts to police automated pricing.

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In a Sept. 29 decision in RealPage Inc. v. James, U.S. District Judge Valerie Caproni preliminarily barred New York Attorney General Letitia James from enforcing a provision that prohibits landlords from using software recommendations to set rental prices, on grounds that such advice is commercial speech protected by the First Amendment. But she left intact a separate prohibition on facilitating agreements among competing landlords not to compete.

The ruling exposes a tension policymakers increasingly face as they try to regulate pricing algorithms. Governments can prohibit anticompetitive conduct, but restrictions that reach the communication of pricing recommendations may require a separate constitutional justification.

New York enacted the law in October 2025 as an addition to its Donnelly Act antitrust statute. It targets software that performs a “coordinating function,” such as collecting rental information from independent landlords, processing that information and recommending rents, occupancy levels or other lease terms.

The distinction between the law’s two prohibitions proved key to Caproni’s ruling. Section 2 of the law addresses facilitating an anticompetitive agreement, including through software. Section 3 treats a landlord’s setting or adjusting lease terms based on recommendations from coordinating software as an unlawful agreement.

RealPage, which licenses rent-recommendation software to property owners and managers, sued in November 2025.

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