The antitrust division of New York Attorney General Letitia James’s office is reportedly looking into Compass’s dominance in the New York residential market, and at least one major brokerage has confirmed being contacted as part of the inquiry.
State investigators have apparently contacted leaders at several top New York City brokerages requesting information as part of the inquiry, according to The Real Deal, which first reported on the investigation. An executive at a New York City brokerage confirmed the outreach to RISMedia, but declined to detail what information the office requested.
The Attorney General’s office has not yet released any public information about the alleged investigation, nor did it immediately respond to RISMedia’s request for comment. A spokesperson for Compass declined to comment on the matter.
The scrutiny follows Compass’s $1.6 billion acquisition of Anywhere, which closed January 9. The deal made the combined entity the largest residential real estate firm in the country, with more than 330,000 agents affiliated with the combined brokerages and brands.
Following the merger, in February, a group of 18 Democratic lawmakers publicly questioned the Department of Justice (DOJ) on whether it ignored its own antitrust review process, asking Attorney General Pam Bondi to detail the procedures by which the deal was approved.
“These developments raise serious questions about whether—under your watch—the (DOJ)’s merger review process has been corrupted, whether antitrust experts were afforded appropriate independence, whether well-resourced parties had an uneven ability to obtain high-level access outside normal channels, and whether parties agreed to anything in return,” the letter reads.
The speed of the merger has drawn criticism from within the industry. Bess Freedman, CEO of Brown Harris Stevens, said the merger’s path through federal review caught many off guard.
“The speed at which the Compass-Anywhere merger sailed through the DOJ without any scrutiny whatsoever was surprising to me and to many others in the industry,” she noted. “I am concerned with the growing practice and scale of Compass’ private listings networks in NYC and beyond because they are having a negative impact on buyers and sellers—the people we have a fiduciary duty to serve.”
Following news of the probe, Compass stock took a hit, with shares falling 12% on Wednesday.
This is a developing story. Stay tuned to RISMedia for updates.
