The company has become a lightning rod for discussions about software rental pricing. The company is also the subject of a civil lawsuit over alleged violations of antitrust laws.
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Rental software company RealPage said Friday it has been informed that the Department of Justice has concluded its criminal investigation into apartment rental pricing, although a civil lawsuit involving the company is still ongoing.
RealPage said in an announcement that the Department of Justice “has concluded a criminal investigation into pricing practices in the multifamily rental housing industry.” The company also defended itself, saying it had never violated antitrust laws.
“RealPage cooperated extensively with the Department of Justice throughout the investigation, and we have maintained our belief that RealPage never violated antitrust laws,” the statement added. “Throughout its investigation, the Department of Justice did not single out RealPage as a target of its investigation. We are grateful that the Department of Justice found it worthy to conclude its investigation.”
The Justice Department did not immediately respond to Inman’s request for comment on Friday, and its website did not list any closure of the criminal investigation into apartment rent-setting.
News of the investigation’s closure comes just over two years after a ProPublica report suggested that RealPage’s algorithms may have played a role in rising rents across the United States. The report focused on YieldStar, which is part of RealPage software, the company announced. The company’s website was aimed at “rent price optimization.”
This report helped foster a national discussion on rental pricing software. RealPage in particular became a lightning rod in this discussion. The report also sparked dozens of class-action lawsuits by renters and proposed federal legislation to crack down on algorithmic rent pricing. Finally, during the recent presidential campaign, Vice President Kamala Harris also announced that she would like to employ rent pricing algorithms as part of her housing platform.
The Justice Department eventually opened a criminal investigation in March. When Inman asked RealPage on Friday about previous reporting on the investigation and whether it was the same as the recently concluded investigation, company spokeswoman Jennifer Bowcock said they were indeed the same. I answered that it was. He also reiterated that the company was “never identified as a target.”
In August, the Department of Justice and eight state attorneys general filed a civil lawsuit against RealPage. At the time, the Department of Justice accused RealPage of using “an illegal scheme to reduce competition among landlords in apartment pricing and monopolize the market for commercial revenue management software used by landlords to price apartments.” issued a statement.
RealPage announced Friday that the criminal investigation has concluded, but a civil lawsuit against the company by the Department of Justice continues. RealPage filed a motion Tuesday to dismiss the lawsuit. The company said in its complaint that the government could not “allege anticompetitive effects in the relevant market” or “allege that RealPage engaged in exclusionary conduct.” A lengthy supporting document, also filed in court on Tuesday, calls the government’s claims “insufficient” and “particularly egregious.”
The judge overseeing the civil case has not yet ruled on RealPage’s motion to dismiss.
“We continue to vigorously defend the remaining civil claims previously filed, which we believe are completely without merit,” Real Page said in a statement Friday regarding the criminal investigation.
“As we have previously explained, including our dedicated website, RealPage’s revenue management software is intentionally built to be compliant, increase competition across the rental housing ecosystem, and increase the configurable,” the statement added. “RealPage Revenue Management customers always have complete discretion to accept or reject pricing recommendations, and they do exercise that discretion on a regular basis.”
Read Tuesday’s document explaining RealPage’s argument for dismissal of the civil suit (if you don’t see the document, refresh the page).
Email Jim Dalrymple II
