The U.S. Department of Justice launched an investigation into the property management software company and several multifamily building operators, which authorities believe cooperated in a “price-fixing combination.”
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The U.S. Department of Justice has reportedly launched a criminal investigation into property management software company RealPage and several unnamed multifamily building operators for their alleged involvement in a massive price-fixing scheme.
Politico The Justice Department is investigating whether RealPage helped facilitate pricing on some large rental properties where owners use the software, reports said on Wednesday, citing four unnamed sources.
The move would be the latest escalation in a federal campaign against RealPage, triggered by a ProPublica report that first suggested RealPage could help drive U.S. rental prices to unprecedented highs. The report prompted more than 30 renter class-action lawsuits and proposed federal legislation to ban rent arithmetic pricing.
The federal government has intervened in the class-action lawsuit. Last fall, the company filed a brief in the U.S. District Court for the Middle District of Tennessee arguing that a class-action lawsuit against RealPage should proceed and that it was illegal under antitrust law for multiple apartment operators to use the same algorithm to set rental prices. of.
In supporting the tenants’ case, the Justice Department said, “In short, RealPage allegedly displaced independent price competition decisions, which would have typically resulted in lower prices for tenants, and its combination of price fixing violated” antitrust laws.
Of particular interest to the government is RealPage’s Yardi software, which landlords can use to estimate supply and demand for their listings, helping them maximize their asking rents. The government is reportedly concerned that the software is being used by competing multifamily operators to exchange pricing information that they would not otherwise have access to.
The Justice Department’s criminal investigation, reportedly two years in the making, began as a civil probe conducted by the department’s antitrust attorneys. politics. Justice Department attorneys reportedly issued subpoenas on behalf of federal grand jury in Washington, D.C.
As President Biden outlined in his recent State of the Union address, cracking down on antitrust violations has become a cornerstone of the Biden administration’s domestic agenda.
“For millions of renters, we are cracking down on big landlords who are violating antitrust laws by manipulating prices and raising rents,” Biden said in a March 7 speech.
The U.S. Justice Department has not commented publicly on the investigation. RealPage did not respond to Inman’s request for a statement about the reported criminal investigation, but in a statement it denied wrongdoing. politics.
“RealPage’s revenue management software is specifically designed and built to comply with the law, as evidenced by our history of constructive cooperation with the Department of Justice,” company spokesperson Jennifer Bowcock said in a statement to the media. “In fact, in 2017, In 2016, the Department of Justice analyzed a large amount of information about YieldStar and (lease-rent options) when it Obtain antitrust clearance Support RealPage’s acquisition of LRO, but do not object to the nature of our revenue management products. “
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