Rivals Subpoenaed in Justice Probe of Homestore.com
Homestore.com’s closest competitors said Tuesday that they received civil subpoenas from the Justice Department asking for detailed information on their business practices for use in an ongoing antitrust investigation of the Internet’s largest real estate site.
The subpoenas signal that antitrust lawyers are reviewing Thousand Oaks-based Homestore’s proposed $1-billion acquisition of Cendant Corp.’s Move.com, but not that the department is broadening its investigation of Homestore, said Gina Talamona, a Justice Department spokeswoman.
“The antitrust division is looking at the possibility of anti-competitive practices in the online realty industry, and we’re looking at the proposed transaction between Homestore.com and Cendant,” Talamona said.
Antitrust officials routinely review proposed mergers and acquisitions in excess of $15 million under the Hart-Scott-Rodino Antitrust Improvements Act.
The Justice Department announced six months ago that it is investigating Homestore for possible anti-competitive business practices stemming from exclusive contracts the firm has with many of the country’s largest residential property listing services.
Homestore has secured more than 95% of the nation’s home listings, about 1.5 million entries, largely through its relationship with the industry’s largest trade group, the National Assn. of Realtors. It’s closest competitor, HomeAdvisor.com, has about 800,000 listings.
Homestore didn’t return calls for comment. But in an interview with Bloomberg News, Chairman and Chief Executive Stuart Wolff said Homestore did its “homework” on the Move.com purchase and wouldn’t have agreed to buy the company if it thought the federal government would block the deal.
The subpoenas, sent to Microsoft Corp.’s HomeAdvisor.com, Homes.com and HomeSeekers.com, ask for confidential documents that discuss their business practices. It also asks that the firms respond by the end of the month.
The subpoenas ask rivals to respond to 11 multipart questions on topics ranging from deals with local realty boards to difficulties selling advertising, according to the Wall Street Journal.
Federal investigators also appear to be looking into whether Homestore’s proposed acquisition of Move.com would expand its reach into the offline real estate market by providing it access to agents who work in Cendant’s franchisee network, the newspaper said.
The proposed deal includes a provision by which Cendant Mobility, Cendant’s relocation company, and NRT Inc., its largest real estate franchisee, would agree to use Homestore’s transaction management platform exclusively for three years.
NRT represents about 32,000 real estate agents, or about 16% of New York-based Cendant’s total franchisee network of 200,000 agents working under the Coldwell Banker, ERA and Century 21 banners.
