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DOJ opens criminal probe into RealPage for price-fixing

Federal lawmakers proposing ban on algorithmic rent pricing

DOJ Places RealPage In Its Crosshairs Again
Attorney General Merrick Garland and RealPage CEO Dana Jones (Getty, RealPage)

The Department of Justice is scrutinizing property management software firm RealPage once again, launching a criminal probe into the company.

The DOJ is investigating RealPage and several multifamily operators for alleged large-scale price fixing, according to Inman. The multifamily operators in the investigation’s crosshairs were not named; several landlords have been accused in lawsuits, however, including Essex Property Trust, Equity Residential, Camden Property Trust and Greystar Real Estate Partners.

The probe was first reported by Politico. It has been ongoing behind the scenes for two years, starting as a civil investigation led by the department’s antitrust team.

The Justice Department is looking into whether RealPage facilitated price fixing at large rental properties. The regulator is looking specifically at the software deployed by the firm, which landlords can use to estimate supply and demand and therefore, set advantageous pricing. 

The authorities are concerned that the software gives landlords unfair access to confidential pricing data that their competitors would not have. The DOJ’s lawyers have submitted subpoenas on behalf of a federal grand jury. 

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The DOJ did not comment on the investigation. RealPage, meanwhile, denied wrongdoing in a statement to Politico. 

““RealPage’s revenue management software is purposely designed and built to be legally compliant,” a spokesperson told The Real Deal.

RealPage merged with Lease Rent Options in 2017, creating one of the country’s largest providers of rent-setting analytics. That merger received antitrust clearance, RealPage pointed out in its defense. The DOJ flagged the merger, but Donald Trump’s appointees declined to challenge it in court.

More than 30 class-action lawsuits have been filed by renters against RealPage since the October 2022 bombshell investigation published by ProPublica, which detailed how the YieldStar software could inflate rents and depress competition. The DOJ is involved in the lawsuits, filing a brief arguing that the cases should move forward and that multifamily operators using the same algorithm to set rental prices is illegal.

Federal lawmakers have since proposed legislation to ban algorithmic rent pricing.

— Holden Walter-Warner

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