The U.S. Department of Justice closed its criminal investigation into RealPage’s pricing practices in the multifamily rental housing industry, according to a news release form RealPage.
“RealPage will continue to aggressively defend itself in the remaining, previously filed civil lawsuits, which we believe are wholly without merit,” the company stated in the news release.
The news came three days after the Richardson-based firm filed a motion to dismiss the antitrust case that the DOJ filed in August in federal court in North Carolina. The abrupt turn in the case followed the election of Donald Trump, who some expect will de-emphasize antitrust enforcement.
RealPage’s motion called allegations that it engaged in a price-fixing conspiracy “baseless.” Specifically, it argues the DOJ has failed to show that the company has monopoly power or dampens competition in the market.
The saga began in October 2022 when ProPublica reported that RealPage’s proprietary software — which uses data from other buildings to suggest rents to landlords — was driving up rents.
Class-action lawsuits piled on, and federal and state lawmakers pushed for legislation to address the way algorithms are used to determine rent pricing. The DOJ sued RealPage in August, accusing the company of creating what amounts to a landlord cartel.
Industry insiders have pushed back on what they believe to be an unfair categorization of what’s known as revenue management software — a tool companies have used for pricing since the 1980s.
Stephen Weissman, RealPage’s outside counsel, said in a call with reporters that the DOJ “doesn’t have the facts that it needs” for the claims it’s made in the lawsuit. The DOJ didn’t respond to requests for comment.
One of the sticking points in the monopoly allegation was how to measure RealPage’s market share.
The DOJ in its complaint alleged that use of RealPage’s software ranges from about 29 percent to 60 percent in more than 130 markets.
RealPage has a problem with the way these ranges were calculated, including its claim that argues the share should be measured with a broad denominator of all rental units in a particular market, which would put 300-unit buildings in the same category as a duplex. As a result, the share of rental units affected by the software is much smaller than if the number were compared to units in buildings of a particular size.
Weissman claims the options are the same from the point of view of a consumer.
For example, someone looking for rental housing would realistically be looking at a variety of products, which could range from small-format rental properties to huge buildings.
The case, taken up during the Biden presidency, faced an uncertain future in President-elect Trump’s upcoming term. Experts have predicted a Trump DOJ will pivot from the antitrust enforcement that’s become a priority for Biden’s Justice Department, the Associated Press reported last month.
Trump on Wednesday tapped Gail Slater to head the Department’s antitrust division. He indicated on social media that Slater will focus on reining in “Big Tech,” namely Google and Apple.
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Weissman had told reporters Slater “will be wonderful,” but didn’t predict how the transition might change the case.
“We’re hopeful that whether it’s this administration or the future administration, it will appreciate the pro-competitive virtues of our product,” he had said.