Compass reportedly facing antitrust scrutiny in NY
The state Attorney General’s office is gathering information about Compass’ market share in NYC following its acquisition of Anywhere, The Real Deal reported.
Compass share prices dropped on Wednesday following a media report that the New York Attorney General's office is looking into the company over antitrust concerns.
The brokerage giant's stock price fell by nearly 15% soon after The Real Deal published a story indicating the AG's office was investigating Compass' market dominance in New York City. The stock price recovered a bit in afternoon trading, but was still down around 11% for the day with a few hours left in the trading session.
Citing an unnamed source, The Real Deal reported that the state AG's office has reached out to leaders at some of New York City's largest brokerage firms as part of its inquiry.
The Attorney General's office has not released any information about a possible investigation. In an email to Real Estate News, Compass declined to comment about the story or any potential investigation.
Minimal scrutiny of the Anywhere deal: If the Attorney General is conducting an antitrust probe into Compass, it would likely involve the brokerage's $1.6 billion acquisition of Anywhere Real Estate, which closed in January and led to the creation of Compass International Holdings.
The deal sailed through the regulatory review in just four months, prompting concern from several U.S. lawmakers, who sent a letter to the Department of Justice.
"This decision raises questions about corruption under your watch and its impact on housing affordability for American families," according to the letter, which was signed by six senators and 12 representatives.
Soon after the deal closed, The Wall Street Journal reported that antitrust enforcers at the DOJ wanted to investigate the merger but were overruled by senior officials.
Market share questions: A Capitol Forum report released in December suggested that the acquisition of Anywhere would lead to the merged company exceeding government market share merger guidelines in a number of markets, including Manhattan, where the combined transactions of Compass and Anywhere totaled more than 80% in 2024, according the Capitol Forum report.
Market shares above 30% "indicate that a merger's effect may be to eliminate substantial competition," according to the Federal Trade Commission guidelines.