REA Group in Hot Water With Competiton Authorities Over Undisclosed Acquisition

February 16, 2024
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The Australian real estate marketplace operator REA Group is facing a review from the country's competition authorities after it failed to disclose a proposed deal to acquire digital forms platform, Dynamic Methods.

REA Group operates the leading real estate portal in the market (Realestate.com.au) as well as mortgage broking services (Mortgage Choice), property data, research and valuation services (PropTrack and property.com.au) as well as vendor paid advertising and home preparation finance services (Campaign Agent).

Dynamic Methods specialises in providing digital versions of common legal forms used in real estate transactions such as residential tenancy agreements and sale agreements. In some Australian states, the company is the only provider of digital forms that real estate institutes can use in line with legislation.

The Australian Competition and Consumer Commission (ACCC) is concerned that the deal may reduce competition and started an informal review of the deal back in November requesting views on the deal from other industry stakeholders. Yesterday the commission published a 'Statement of Issues' outlining its concerns.

“We are concerned that by expanding REA Group’s existing ecosystem of products and services, this acquisition may extend REA Group’s already strong position and give it the ability and incentive to significantly harm competitors,” said Liza Carver, ACCC Commissioner.

“Industry participants such as real estate service providers have expressed serious concerns to us about how the proposed acquisition will entrench REA Group’s position of strength in the supply of real estate services.”

“Many are concerned that REA Group, which operates realestate.com.au, will have the ability to control access to, and data from, digital forms which are necessary for providing real estate related services."

In response, the REA Group released a short notice to the market stating that the proposed acquisition would not be material to the price or value of its shares and that it is confident that the deal would not lessen competition.

A preliminary date for the ACCC's decision on the matter has been set for the 9th of May.

February 16, 2024
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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