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Rental software company RealPage announced Friday that it received word the Department of Justice has ended a criminal investigation into multifamily rental pricing — though a civil case involving the company is still ongoing.
In its announcement, RealPage said that the DOJ “has closed its criminal investigation into pricing practices in the multifamily rental housing industry.” The company also defended itself, saying it had never broken antitrust rules.
“RealPage extensively cooperated with the DOJ throughout its investigation, and we have remained steadfast in our belief that RealPage never violated the antitrust laws,” the statement added. “Throughout its investigation, the DOJ never identified RealPage as a target of the investigation. We appreciate the DOJ’s recognition that its investigation merited closure.”
The DOJ did not immediately respond to Inman’s request for comment Friday, and the agency’s website did not include any statements about closing a criminal investigation into multifamily rental pricing.
News of the now-ended investigation comes just over two years after a report from ProPublica suggested that a RealPage algorithm may have played a role in driving up rents across the U.S. The report focused on YieldStar, a piece of RealPage software that the company said on its website was geared toward “optimizing rent pricing.”
The report helped foment a national debate about rental pricing software — a debate in which RealPage in particular became a lightning rod. The report also sparked dozens of class-action lawsuits from renters, as well as proposed federal legislation that would crack down on the algorithmic pricing of rents. Eventually, during her recent presidential campaign, Vice President Kamala Harris also indicated that she wanted to take on rent price algorithms as part of her housing platform.
The DOJ eventually opened a criminal investigation in March. When Inman on Friday asked RealPage about earlier reports of that investigation, and if it is the same one that just ended, company spokesperson Jennifer Bowcock responded that they are indeed one and the same. She also reiterated that the company was “never identified as a target.”
In August, the DOJ and eight state attorneys general filed a civil lawsuit against RealPage. At the time, the DOJ issued a statement accusing RealPage of using an “unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market for commercial revenue management software that landlords use to price apartments.”
Though RealPage said Friday that the criminal investigation has ended, the DOJ’s civil lawsuit against the company is ongoing. On Tuesday, RealPage filed a motion to dismiss the case. The company said in its motion that the government failed “to allege anticompetitive effects in a relevant market” and failed “to allege that RealPage has engaged in exclusionary conduct.” A lengthy supporting document, also filed with the court Tuesday, called the government’s allegations “deficient” and “especially egregious.”
The judge overseeing the civil case has not issued a ruling yet on RealPage’s motion to dismiss.
In its statement Friday on the criminal investigation, RealPage said that it “will continue to aggressively defend itself in the remaining, previously filed civil lawsuits, which we believe are wholly without merit.”
“As we have explained, including on our dedicated website, RealPage’s revenue management software is purposely built to be legally compliant, enhances competition throughout the rental housing ecosystem and is highly configurable by our customers,” the statement added. “RealPage revenue management customers always have total discretion to accept or reject pricing recommendations — and customers regularly exercise that discretion in practice.”
Read RealPage’s documents from Tuesday laying out its case to dismiss the civil lawsuit (if the document doesn’t appear, refresh the page):
