Equifax Must Face Suit Over Alleged Market Monopolization

A federal judge has ruled that data analytics company Equifax (EFX.N) must face a lawsuit alleging that it monopolized the market for electronic income and employment verification services. According to Reuters, U.S. District Judge John Murphy in Philadelphia denied Equifax’s motion to dismiss the case, allowing the lawsuit brought by Greystone Mortgage and First Financial Lending to proceed.

The lawsuit, initially filed in May, claims that Equifax has used exclusive long-term agreements with worker data sources to prevent competition in the electronic verification industry. Employers, landlords, and lenders rely on these services to confirm applicants’ income and employment history. Per Reuters, the lawsuit states that Equifax secures verification data through contracts with payroll providers and major corporations, limiting access for competing verification services.

Greystone Mortgage and First Financial Lending argue that Equifax’s practices violate U.S. antitrust laws by restricting rivals’ access to crucial work and income data. The plaintiffs contend that these alleged monopolistic tactics have led to higher costs and fewer choices for businesses that depend on electronic verification services. The lawsuit also claims that Equifax has used acquisitions to maintain its dominant position in the industry.

Read more: Equifax Accused of Monopolizing Employment Verification Market in New Suit

In response, Equifax defended its platform, stating that it will “continue to respond to this litigation through the appropriate legal channels.” Meanwhile, lawyers representing the plaintiffs welcomed the court’s decision, emphasizing their intent to further build the case to support claims of Equifax’s alleged anticompetitive behavior, according to Reuters.

Judge Murphy noted that while Equifax’s industry agreements could potentially be seen as procompetitive rather than anticompetitive, that question remains to be resolved at a later stage in the litigation. He has scheduled a hearing on March 25 to discuss the next steps in the case.

The lawsuit seeks to represent a proposed class of at least tens of thousands of companies that have purchased Equifax’s income and employment verification services. The case is filed under Greystone Mortgage Inc and First Financial Lending LLC v. Equifax Workforce Solutions LLC and Equifax Inc, in the U.S. District Court for the Eastern District of Pennsylvania, case number 2:24-cv-02260.

Source: Reuters