A license that is more than a license

Today, the Commission accepted for public comment a proposed order designed to preserve competition after the merger of CoreLogic and DataQuick, two of only three firms that license national assessor and recorder bulk data. The proposed order does this by facilitating the entry of RealtyTrac to replace the loss of DataQuick as an independent competitor. To establish RealtyTrac as a viable entrant, CoreLogic is required to supply the company with nationwide real property bulk data through a multi-year license. Using a license to facilitate entry replicates the current market structure and, although not typical, is appropriate here given the existing competitive dynamics.

According to the FTC’s complaint, CoreLogic and DataQuick compete to provide national assessor and recorder bulk data. This data is public information about individual real estate properties maintained by county assessor and recorder offices. It consists of descriptive information, such as square footage and the number of bedrooms; and financial data, such as purchase price, mortgage terms, and lien details. CoreLogic and DataQuick provide this data on a nationwide basis to a variety of customers, from financial firms who use the data for risk and fraud analysis to internet start-ups who create consumer-oriented real estate web sites. These customers use both current and historical information, often licensing data that goes back a decade or more. As alleged in the FTC’s complaint, new competitors are not likely to emerge in this market because of the high cost of obtaining the necessary data, especially the cost of gathering historical information. DataQuick and CoreLogic both own years of historical data and can gather their own going-forward data. However, several years ago, DataQuick started getting most of its going-forward data from CoreLogic through a unique license that gave DataQuick rights allowing it to continue serving its customers and competing vigorously with CoreLogic.

Without a remedy, the CoreLogic-DataQuick deal would leave customers with only two choices for national assessor and recorder bulk data. The proposed order enables new entry by requiring CoreLogic to provide RealtyTrac with historical data and deliver going-forward data for up to seven years through a DataQuick-type license. This allows RealtyTrac to enter the market with national assessor and recorder bulk data that is equivalent to that offered by DataQuick and gives RealtyTrac perpetual rights to all of the data—both historical and going-forward—that it receives from CoreLogic pursuant to the Order. Remedying the anticompetitive effects of the transaction through a license is appropriate given that DataQuick’s participation in this market is through a license from CoreLogic.

The goal of a merger remedy is to maintain (or restore) the pre-transaction competitive dynamics in the relevant market. The proposed Order does this by allowing RealtyTrac to enter the market quickly and providing it with the assets and know-how to remain in the market after expiration of the required data license. The fact that it does so using a license is an illustration of how the Commission tailors the remedy to best replicate the competitive status quo while ensuring that the buyer has what it needs to compete quickly and effectively in the relevant market.

The public is invited to comment on the proposed order through April 23, 2014, and comments can be submitted online.