CoStar and LoopNet asked to sell interest in Xceligent for FTC settlement of merger
The Federal Trade Commission has proposed a settlement to resolve its competition concerns with CoStar Group’s $860 million acquisition of LoopNet. CoStar is the nation’s largest provider of information/marketing services to commercial real estate professionals. LoopNet provides online commercial real estate listings in the United States.
In its proposed order, the FTC will require CoStar to sell LoopNet’s ownership interest in Xceligent, a provider of commercial property and listing information. Since Xceligent is considered CoStar’s most similar competitor, a CoStar-LoopNet merger would eliminate the competition between the two companies. LoopNet’s stake in Xceligent will be sold to DMG Information. CoStar-LoopNet is to ensure that Xceligent will be able to compete effectively with the merged entity; this includes selling the URL “commercialsearch.com” to DMG Information.
An additional condition is that CoStar must lift non-compete provisions and allow customers to terminate longer-term contracts early with one year’s notice. CoStar is also prohibited from bundling its products “in ways that could impede its competitors.” The FTC is requiring such specific conduct is to allow rivals or new entrants to enhance competition in the markets for listings databases and information services.
Full content: FTC Press Release
Related content: Information Exchanges Among Competitors: The Commission Takes a New Look (Andreas Reindl, Leuphana University of Lüneburg)
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