Rep. Ken Buck (R-Colo.) and Sen. Mike Lee (R-Utah) sent a letter on Thursday to the FTC that raises antitrust questions related to the residential real estate industry and specifically Zillow Group’s pending $500 million acquisition of ShowingTime. Axios first reported the news.
The letter (read in full below) highlights the growing antitrust scrutiny on tech giants in various industries and is the latest antitrust-related criticism facing Seattle-based Zillow.
Zillow announced in February that it will pay $500 million to acquire ShowingTime, a Chicago-based real estate company that sells software to facilitate home showings.
The Republican lawmakers say the deal, which is still pending, “may further entrench Zillow’s consumer information advantage to the detriment of homebuyers and their competitors.”
Since Zillow’s $2.5 billion acquisition of Trulia in 2015 — which was reviewed by regulators — the company “has made additional acquisitions and expanded to operate as broker, directly competing with the brokers and agents who rely on these tools for their businesses.”
The letter cites Zillow’s homebuying business and its Zestimate property valuation tool, in addition to other acquisitions including purchases of Dotloop, Bridge Interactive, StreetEasy, and nakedapartments.
“While the consumer experience might benefit from certain technological innovations in the real estate industry, antitrust enforcers should be vigilant to ensure that a competitive environment is maintained and the online real estate industry does not become overly consolidated in the hands of a dominant platform to the detriment of competition and consumers,” the letter reads.
They added: “Congress is working to address the intractable competition problems with dominant tech platforms across so much of the internet. Even if Zillow is able to demonstrate that its planned purchase of ShowingTime could provide benefits to consumers and real estate agents and brokers, the antitrust regulators should carefully review any potential anticompetitive impact.”
Here’s a statement from Zillow sent to GeekWire:
“Since our announcement to acquire ShowingTime, ZIllow and ShowingTime have worked constructively with the FTC staff in their thorough review of the transaction.
Our mission has always been to ‘turn on the lights’ for consumers by giving them information previously hidden or incredibly difficult to get access through tools such as the Zestimate and the publishing of millions of agent and lender reviews. Zillow’s tools are designed to maximize transparency, champion simplicity and broaden choice for customers – enabling them to connect with local real estate professionals to guide them on their real estate journey – whether they are buying, selling or renting.
Key to our mission is our work to modernize the real estate transaction – which has been notoriously resistant to consumer-friendly change over the decades. By building an open and equitable service which is available to all agents and brokers, which would include ShowingTime after the closing of the transaction, we are helping move the industry towards a more efficient, digital future that works to benefit consumers.”
Earlier this year Zillow was hit with an antitrust lawsuit filed by Austin-based real estate startup Real Estate Exchange that accused Zillow of anticompetitive behavior related to how certain homes are shown on its platform.
Zillow said in February that it will take advantage of ShowingTime’s technology for its Premier Agent business, which helps generate leads for real estate agents. The company said it plans to keep ShowingTime as an “open platform” available to anyone, much like it has with previous acquisitions including Dotloop and Bridge Interactive.
The deal would be Zillow’s second-largest acquisition to date measured by price, behind the Trulia purchase in 2015. It’s the company’s 17th acquisition to date.
Zillow is acquiring ShowingTime as it continues to invest and grow Zillow Offers, its home-buying and selling service.
The pandemic and real estate boom has helped drive recent growth for Zillow, which saw revenue climb 70% to $1.3 billion for its most recent quarter. The company’s Premier Agent business generated $348.7 million, up 82% year-over-year.
“Zillow is making rapid and significant progress toward building a seamless, integrated real estate experience for our customers and partners,” Zillow CEO Rich Barton said in a statement.
Read the letter in full below. The letter is addressed to new FTC chair Lina Khan, who was confirmed in June and has drawn attention for her criticism of Big Tech. Amazon, for example, is seeking the recusal of Khan from the antitrust investigation over its $8.5 billion purchase of MGM Studios.
In March, Sen. Lee issued a statement criticizing Khan’s nomination to the FTC, noting that “her views on antitrust enforcement are also wildly out of step with a prudent approach to the law.”
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