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FTC Sues to Stop Acquisition of Online Listing Service by Competitor

  • The FTC filed an administrative complaint and authorized a lawsuit in federal court to block the proposed acquisition of internet listing services (“ILS”) provider RentPath Holdings, Inc. (“RentPath”) by competitor CoStar Group Inc. (“CoStar”) over allegations that the proposed $587.5 million acquisition would significantly reduce competition for ILSs for large apartment complexes in 49 metropolitan areas across the United States in violation of the FTC Act and the Clayton Act.
  • The complaint alleges that 70% of U.S. apartment complexes with 200 or more units and approximately 50% of apartment buildings with 100 to 199 units advertise on ILSs operated by either RentPath (including Rent.com and ApartmentGuide.com) or CoStar (including Apartments.com, ApartmentFinder.com, and ForRent.com), and that the proposed acquisition would eliminate price and quality competition that benefits both renters and management companies because RentPath and CoStar are each other’s fiercest competitors, often targeting each other with sales campaigns and discounts to win and retain customers.
  • According to the complaint, the FTC may order relief such as divestiture, reconstitution, or a ban on the combination of RentPath’s and CoStar’s businesses in specific markets, among other things.