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Economics

Inside story on FTC action on CoreLogic’s proposed acquisition of DataQuick

When CoreLogic announced they would be acquiring DataQuick, it appeared they would be controlling the national public data registry, so a lone company joined forces with the FTC to keep fairness alive, and data pure.

ftc complaint

Nearly a year ago, the gears began turning on the $661 million acquisition by CoreLogic of DataQuick and Marshall & Swift/Boeckh from the Decision Insight Information Group, set to close in the final quarter of 2013, until the Federal Trade Commission (FTC) stepped in with concerns that the acquisition would reduce competition in the real estate information market.

The FTC alleged that the combination of CoreLogic and DataQuick’s national assessor and recorder bulk data businesses would increase the risk of anti-competitive coordination between the only two remaining market participants, with Black Knight Data & Analytics (formerly Lender Processing Services (LPS)) being the second half of what would have been the new duopoly had the FTC not gotten involved.

The FTC timeline

The initial complaint was filed with the FTC in January, the Commission interviewed the complainant and gathered information on the case, ultimately creating a proposed settlement order which lists required remedies CoreLogic would need to satisfy, namely that their national assessor and recorder bulk data (and other DataQuick data) must be re-licensed to Renwood RealtyTrac LLC for a minimum of five years, effectively creating a third competitor in the market.

The FTC order notes that the data licensed to RealtyTrac must be the same scope, quality, and speed as what was generated by DataQuick prior to the proposed acquisition, and CoreLogic can’t restrict RealtyTrac’s licensing or marketing of the licensed historical data. Further, the Commission has appointed a Monitor to keep tabs on the execution of the order.

The proposal was open for public comment through April 24th, and now, the FTC is creating a final order based on that commentary, which we suspect will mirror the current version of the order, especially given that in March, a CoreLogic spokesperson spoke positively of the “anti-trust clearance” they had received as a result of the order. The current order makes sense as it keeps competition in the market, and CoreLogic as a data provider probably welcomes the competition for the sake of data purity, so even though there is a delay in the acquisition, all parties win here.

The FTC offers anonymity

When the FTC gets involved in an acquisition, it is typically because someone has alerted them to the potentially restricted market the acquisition would create, and the government offers anonymity to the party who is bringing the matter to their attention.

That party is never required to come forward, and typically they don’t, but in this case, the complainant is making themselves known to Realuoso, even though the FTC offers no protections.

Unmasking the data defenders

Enter real estate information systems company, iMapp, which offers tax roll data, parcel maps, and integrated MLS information. They are customers of DataQuick, and although they don’t rely on DataQuick data exclusively, they do use it to enhance their historical data sets, and became concerned about the potential for anti-competitive coordination between LPS and CoreLogic.

Instead of beating their chest and rallying other DataQuick customers, associations, and concerned professionals, they bravely stepped up to bat with high profile D.C. lawyers (that they paid for out of pocket) to file the complaint, asserting that with only two companies charged with this tremendous amount of data, CoreLogic and LPS could pick and choose who they sell data to and for how much, and could even cut off some companies altogether.

Instead of choosing the publicity and limelight of being data defenders, they quietly took on the battle themselves, and haven’t spoken publicly on the topic until today.

Why come forward?

iMapp CEO, Bill Rovillo tells Realuoso, “Had this acquisition been allowed to proceed unnoticed and unchallenged, CoreLogic would have had the ability to control and limit the access to a vast database of historical public record data. It would be cost prohibitive for a company to recreate an historical database of this magnitude.”

Rovillo added, “The FTC created a viable remedy for a lot of companies, but from our standpoint, the big winner is REALTORS who can now be assured that their many choices for real estate data applications continues.”

It is fascinating to watch a lone company take on huge conglomerates, and even more fascinating that they never pat themselves on the back for this David/Goliath style battle. Further, they are at risk of retaliation now that they are unmasked, but they stepped forward anyhow, because this acquisition is so much bigger than CoreLogic going on a shopping spree; it is critical that data remain free flowing, untainted, and accurate.

The iMapp team feels that they are defending the real estate industry and fighting for quality data, a noble cause that real estate professionals will get behind, now that they know the reason behind David facing Goliath.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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