Two prominent Democrats have some serious bones to pick with the proposed $1.6 billion merger of real estate brokerage giants Compass and Anywhere, claiming the deal “threatens to stifle consumer choice and fair industry competition.”
Democratic Senators Elizabeth Warren and Ron Wyden are asking federal antitrust regulators to “thoroughly investigate” the pending deal, which they claim would “entrench existing antitrust and price manipulation concerns that have been at the center of mounting litigation.”
TAKE THE INMAN INTEL SURVEY FOR DECEMBER
Antitrust regulators declined to intervene when Democrats raised similar concerns about mortgage lending giant Rocket Companies’ acquisitions of Redfin and Mr. Cooper this year.
A spokesperson for Compass Real Estate said the company has “nothing new to share” on the deal.
“All we have to say immediately about the deal is in the news release announcing the combination,” Compass spokesperson Devin Daly said in an email. Daly also provided a link to the brokerage’s position on “homeowner choice,” defending the company’s stance on private listings.
“We are building a more open, competitive marketplace — one that gives homeowners and agents real choice, more transparency, and smarter strategies,” Compass CEO Robert Reffkin is quoted as saying on the web page.
A spokesperson for Anywhere Real Estate declined to comment.
In a Dec. 16 letter to antitrust regulators at the Department of Justice and Federal Trade Commission, Warren and Wyden said “large brokerages such as Compass and Anywhere have grown by acquiring or absorbing smaller regional firms.”
The top 10 percent of brokerages already control 42 percent of U.S. sales volume, Warren and Wyden claimed, citing data compiled by T3 Sixty.
“Because brokerages control access to listings and market data, consolidation in this sector can directly affect what homes consumers see, how much they pay, and who can participate in the market,” Warren and Wyden wrote. “The proposed merger would amplify those risks by consolidating enormous market power into a single entity.”
If the merger is allowed to proceed, the Democratic lawmakers claimed it could increase market concentration — possibly in violation of federal antitrust laws — leading to “anticompetitive harm.”
“The merger would place enormous pressure on mom-and-pop and independent brokerages, which play a vital role in serving local communities and offering lower-cost, consumer-friendly alternatives,” Warren and Wyden claimed.
“As consolidation reshapes the industry, smaller, independent firms face an impossible choice: be absorbed into national networks or shut their doors, not because of inefficiency, but because they cannot compete against the branding, technology, capacity and network effects of mega-brokerages,” they warned.
