Rent-to-own (RTO) companies Rent-A-Center, Buddy’s and Aaron’s have all settled a case with the Federal Trade Commission (FTC) alleging they made reciprocal non-competition deals with each other that violated federal antitrust law and created an environment that limited choices for consumers, according to an FTC press release.
The complaints said from June 2015 to May 2018 “Aaron’s, Buddy’s, and Rent-A-Center each entered into anti-competitive reciprocal agreements with each other and other competitors. These agreements swapped customer contracts from rent-to-own, or RTO, stores in various local markets. An outcome was that one party to the agreement closed down stores and exited a local market where the other party continued to maintain a presence.”
The agreements, the release said, led to stores closing that probably wouldn’t have done so otherwise and lessened quality and service for consumers.
Customers who rented from stores had to travel to those particular stores to make payments, and closing a store would increase their travel time and costs.
In addition, the companies’ agreements meant that there were requirements to not compete in a specified territory for a period of three years.
“These agreements affected consumers who already had few options for furnishing a home on a limited budget,” said Ian Conner, director of the FTC’s Bureau of Competition. “The FTC’s orders get rid of the agreements, reopen affected markets to competition, and bar these companies from doing this again.”
The FTC settlement means the three RTO companies can’t enter into similar agreements in the future.
“The three RTO companies must also implement antitrust compliance programs, notify the commission in the event of certain changes in corporate governance, and grant the commission access to company facilities as needed to ensure compliance with the order,” the release stated. “Finally, due to prior board-level relationships between Aaron’s and Buddy’s, these firms are barred from having any of their representatives serve as a board member or officer of a competitor, and from allowing any competitor’s representative to serve on their boards.”