Reps. Ken Buck and Sen. Mike Lee, senior members of the House and Senate Antitrust Subcommittees, asked the FTC to “look closely” at “competition issues” in the real estate space.
Two Republican lawmakers have sent a letter to the Federal Trade Commission urging the agency to review the proposed acquisition of ShowingTime by real estate giant Zillow, warning that the deal could harm homebuyers and Zillow’s rivals.
In a statement, Zillow confirmed that the ShowingTime deal is currently under review by the FTC.
The investigation comes at a time when federal regulators are through appointments to the Federal Trade Commission and an executive order encouraging the FTC to exercise their regulatory powers “in areas such as … unfair restrictions on licensing; unfair retention or exclusive practices in brokering or listing real estate; and all other unfair industry-specific practices that significantly impede competition. “
In the August 12 letter, Reps Ken Buck, R-Colorado, and Senator Mike Lee, R-Utah, senior members of the House and Senate antitrust subcommittees, called on the FTC to “Examine Residential Competition Issues.” . Real Estate ”and allowing online real estate to be“ overly consolidated in the hands of a dominant platform to the detriment of competition and consumers ”. They specifically highlighted Zillow as a company that “could pose competition problems”.
“Most of Zillow’s growth in terms of size and businesses has come from vertical and horizontal acquisitions, the vast majority of which have not been reviewed by antitrust authorities,” wrote Buck and Lee.
They pointed to Zillow’s acquisitions of Dotloop, Bridge Interactive, StreetEasy and Naked Apartments and found that only the purchase from Trulia had been examined and unconditionally approved.
The $ 500 million acquisition of ShowingTime, which has been controversial in the industry since it was announced in February, “could further consolidate Zillow’s consumer information advantage,” lawmakers said.
“Zillow already has a potentially unfair advantage over unrepresented sellers in its iBuying business, which buys homes directly from consumers and seeks to resell those homes for a profit,” the letter continued. “Homeowners can be inappropriately swayed when considering a listing from Zillows Zestimate, the largest consumer home valuation resource.”
“The effect of Zillow’s acquisitions appears to be that it can effectively tell the homeowner what their home is worth, buy the home from the homeowner for that amount, and then turn over and sell the home instantly at a higher price,” it says in continue with the letter.
The letter closes with the words: “Congress is working to address persistent competition problems with dominant technology platforms” and that the FTC should “carefully review the proposed acquisition of ShowingTime for” possible anti-competitive effects “”.
In a statement sent via email, a Zillow spokesperson told Inman that “Zillow and ShowingTime have worked constructively with FTC staff in their thorough review of the transaction” since Zillow announced the deal.
“Our mission has always been to ‘turn the lights on’ for consumers by providing them with previously hidden or incredibly inaccessible information through tools like the Zestimate and posting millions of agent and lender reviews,” the spokesman said.
“Zillow’s tools are designed to maximize transparency, promote simplicity, and widen choice for customers – they allow them to connect with local real estate professionals to guide them on their real estate journey – whether they’re buying, selling, or renting.
“The key to our mission is our work on modernizing the real estate transaction – which has notoriously resisted consumer-friendly changes over the decades,” added the spokesman. “By building an open and equitable service that is available to all agents and brokers, including showing time after the deal is complete, we are helping to lead the industry into a more efficient, digital future that benefits consumers.”
William Schoeffler, founder of ShowingTime rival Instashowing, said Inman understood why the government would be interested in the ShowingTime deal.
“Showing data is the most accurate forward-looking set of data there is, and that informational head start in the hands of a major statewide broker would be groundbreaking for Zillow’s iBuying and brokerage,” he said in a statement emailed. “Every MLS we’ve talked about asked us about our data policy because that’s their main concern.”
An FTC spokesman confirmed the agency had received the letter but declined to comment on the story because the agency did not comment on the letters from Congress.
Email to Andrea V. Brambila.
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