Watchdogs Urge FTC, DOJ Probe of Compass-MRED Deal

Consumer Federation of America (CFA) and other watchdog organizations have urged the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to investigate the proposed acquisition of Midwest Real Estate Data (MRED) by real estate brokerage Compass. The call for investigation was made in a letter sent to the agencies this week, coinciding with a preliminary injunction hearing in Illinois. This hearing, involving Zillow, Compass, and MRED, is examining the potential antitrust implications of the deal.

The letter highlights concerns that the acquisition could lead to increased costs for consumers and stifle competition within the real estate market. MRED, a major Multiple Listing Service (MLS) provider in the Chicago metropolitan area, manages a vast database of property listings crucial for real estate agents and brokers. Critics argue that Compass, a large national brokerage, gaining control of such a critical data infrastructure could create an unfair advantage and potentially restrict access for competitors.

Antitrust advocates are particularly worried about the consolidation of power within the real estate data ecosystem. They point to previous instances where the control of MLS data by large entities has been scrutinized for its impact on market dynamics and agent commissions. The CFA and its allies are pressing the FTC and DOJ to thoroughly review the competitive landscape and consumer impact before the deal proceeds further. The outcome of the preliminary injunction hearing is expected to provide further clarity on the immediate legal standing of the proposed transaction and the potential for a broader federal review.