The Federal Trade Commission (FTC) has intervened in the antitrust allegations swirling around CoStar’s commercial real estate business. The FTC is urging the Ninth Circuit Court of Appeals to reconsider a lower court’s decision that dismissed antitrust counterclaims brought by Commercial Real Estate Exchange Inc. (CREXi) against CoStar.
CoStar, a major player in the real estate industry with a market cap of $25 billion, has managed to evade antitrust challenges in its residential business, reported RealEstate News. However, the commercial side of the company faces scrutiny over allegations of monopolistic practices, specifically accusations that CoStar has hindered brokers from sharing listing information with its competitors under the threat of losing access to CoStar’s services.
The roots of the legal battle trace back to a copyright infringement case initiated by CoStar against CREXi in 2020. CoStar claimed that CREXi was attempting to establish its own online commercial real estate marketplace and auction platform by capitalizing on CoStar’s substantial investments and decades of hard work. CREXi retaliated with a countersuit, alleging unfair and monopolistic behavior by CoStar, resulting in inflated prices for its services and asserting that CoStar held monopoly power in internet commercial real estate listing, information, and auction services across numerous metropolitan areas in the United States.
The recent development came on January 26, 2024, when the FTC filed an amicus brief with the Ninth Circuit Court of Appeals, expressing concerns about the lower court’s dismissal of CREXi’s antitrust counterclaims in February 2023. The FTC argued that the district court had made three fundamental legal errors, which, if not corrected, could shield harmful monopolistic conduct from antitrust scrutiny.
It’s important to note that the FTC clarified in its brief that it was not taking a position on whether CoStar was illegally operating as a monopoly but acknowledged that it is actively investigating the allegations. The FTC’s brief is solely based on the complaint allegations and not on any information obtained during their investigation into this matter or any other.
Source: Real Estate News