The American real estate data giant CoStar's purchase of troubled rental portal operator RentPath may have hit the rocks as the Federal Trade Commission has sued the company for an alleged breach of US competition law. The commercial real estate specialist has been on a buying spree of late having agreed to acquire residential operator Homesnap last week and before that having stepped into the breach to offer $587M to purchase RentPath, a company that had recently filed for bankruptcy.
CoStar has a very dominant position in the commercial real estate data and marketing sector and according to the FTC it would also have an unacceptable hegemony in the rentals space as well with the purchase of RentPath which owns and operates the portals Rent.com and ApartmentGuide.com, while CoStar’s holdings include the rental portals Apartments.com, ApartmentFinder.com and ForRent.com.
Until the announcement of the acquisition back in February, CoStar and RentPath had been direct competitors in the world of US rental marketing, and According to the FTC's Deputy Director of the Bureau of Competition:
“This acquisition will eliminate price and quality competition that benefits both renters and property managers.”
The FTC complaint was filed on Monday and the ensuing trial is due to start in June 2021. Details of the FTC's complaint have not yet been made public and so there is no specific indication about what aspect of the deal the governing body has deemed to be anti-competitive.
CoStar has made no secret of its ambition to move into residential real estate in the United States and Founder Andy Florance has been a fierce critic of both Zillow and Realtor.com, taking to the airways last week to blast both in a very forthright interview with industry leader Brad Inman.