Home Business Xceligent Sues CoStar for Antitrust Violations

Xceligent Sues CoStar for Antitrust Violations

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Xceligent CEO Doug Curry

KANSAS CITY, MO–Xceligent, a provider of commercial real estate information, has filed an antitrust suit  against CoStar Group (Nasdaq: CSGP) to protect the commercial real estate industry from CoStar’s monopolistic business practices. Xceligent is fighting to prevent CoStar from blocking the commercial real estate (CRE) industry’s ability to freely share its information.

In its filing, Xceligent states:

  • CoStar knowingly contaminates broker listings and property data with fake data points.
  • CoStar falsifies data in both its private databases and in public broker-loaded listings on LoopNet, without notifying the broker or property owner of the change to their proprietary information.
  • CoStar then:
    • Asserts brokers and property owners no longer have exclusive rights to their own information,
    • Precludes brokers and property owners from sharing their information with any CoStar competitor,
    • Claims that no CoStar competitor has the rights to accept the information.

Xceligent’s claim further states that CoStar slips provisions into customer contracts to enable CoStar to falsify brokers’ information without informing them when they change the data, while at the same time requiring the customer be able to prove the origination of every field of data. This puts CRE professionals at risk if they share their own information, because the provisions make it impractical for any industry participant to safely convey their own information to a CoStar competitor.

Xceligent CEO Doug Curry

Xceligent CEO Doug Curry said the company is not only asking for monetary relief for antitrust activities and defamation, but is also asking the federal government to bring an end to CoStar’s decades-long monopoly in the CRE information industry. Curry said, “Throughout its history, Xceligent has continuously evolved its business model to better partner with and do what is right for the industry. We feel it’s our duty to protect the brokers’ rights to freely share their information and meet their fiduciary responsibilities to their clients. We gladly take up this fight and we will not rest until the industry has clear safeguards against an obvious abuse of power by CoStar.”

Additionally, Xceligent seeks to protect the 2012 FTC Consent Decree provision that prohibits CoStar from directly or indirectly blocking a broker’s ability to share the information on their properties. This provision included the protection for any competitor to be able to update broker’s information from their own websites that are powered by CoStar’s LoopLink product. Xceligent alleges that CoStar violated the Consent Decree by blocking Xceligent’s access to these brokerage firms websites, which contain 100% broker-loaded information.

Prior to CoStar’s purchase of LoopNet, CoStar’s CEO, Andrew Florance, admitted in a 2008 lawsuit between CoStar and LoopNet that this activity should be allowed and that CoStar researchers used these same methods to update the CoStar database. Although CoStar makes broad accusations that Xceligent has improperly accessed LoopNet, which Xceligent vehemently denies, Florance also admitted to CoStar’s use of those very same research methods in his 2008 LoopNet lawsuit by admitting that “CoStar had to update its database from broker websites or from listings on the LoopNet website to which brokers had directed CoStar by email.”

The timing of CoStar’s most recent lawsuit is suspect as it coincides with Xceligent’s launch of the New York Tri-State region, the largest commercial real estate market in the US. CoStar’s complaint is littered with false and defamatory statements intended to discredit the comprehensive and well-established research procedures that Xceligent has developed over its 18 year history.

Xceligent is the only remaining viable competitor to CoStar and the only competitor to ever dedicate the substantial resources and funding (over $150m) necessary to create a national alternative to CoStar. Xceligent conducts a comprehensive research process, deploying large teams of drivers into each market to proactively drive and photograph every significant property in the targeted city, creating original, documented photography. The company has performed site inspections of over 1.5 million properties and collected nearly 10 million images. Its team of nearly 1,000 researchers build and maintain a comprehensive database of property characteristics, tenants, historical sales transactions, and available space and properties for sale by making thousands of proactive calls to industry participants to gather information each month.

Xceligent intends to stand up to CoStar’s abusive tactics on behalf of itself and the CRE industry.

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