Equifax, a leading data analytics company, has been hit with a proposed class action lawsuit accusing it of monopolizing the market for electronic income and employment verification services. The suit, filed by home mortgage lenders Greystone Mortgage and First Financial Lending, was brought before the federal court in Philadelphia on Tuesday.
The lawsuit alleges that Equifax, through its Equifax Workforce Solutions unit, has created a “stranglehold” on a critical verification process used widely in consumer finance, per Reuters. Lenders, property managers, and other entities depend on quick, electronic verification of an applicant’s income and employment status for various financial transactions such as mortgages, car loans, and rental agreements. The manual alternative — calling employers directly — is notably slower.
According to the plaintiffs, Equifax has violated antitrust laws by securing exclusive contracts and acquiring potential competitors, thus stifling competition. This market control purportedly enables Equifax to charge prices significantly higher than what would prevail in a competitive market. The lawsuit represents a proposed class comprising tens of thousands of purchasers of Equifax’s verification services.
Related: Equifax Says 85% of Its New Models Built With AI
The complaint highlights that Equifax’s verification business, though less known compared to its credit reporting services, has become a substantial revenue generator, bringing in nearly $2 billion annually. The plaintiffs argue that Equifax’s long-term, exclusive agreements with payroll software providers and major employers have effectively blocked competitors from accessing crucial data, preventing them from building comparable verification databases.
“Equifax has spent billions of dollars acquiring companies that might present a risk of competition to its monopoly,” the plaintiffs stated in the lawsuit. They are seeking unspecified monetary damages and an injunction to halt Equifax’s allegedly anti-competitive practices.
Equifax has yet to comment on the lawsuit.
Source: Reuters
Featured News
Mexico Moves Forward with Reform to Eliminate Key Regulators, Including Competition Watchdog
Aug 23, 2024 by
CPI
DOJ Sues RealPage for Alleged Rent-Fixing Scheme Using AI Software
Aug 23, 2024 by
CPI
Advance Auto Parts to Offload Worldpac for $1.5 Billion
Aug 22, 2024 by
CPI
Bronfman Ups Ante to $6 Billion in Paramount Battle, Skydance Deal at Risk
Aug 22, 2024 by
CPI
Google and California Strike Historic Deal to Fund Newsrooms Amid Controversy
Aug 22, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – State Attorneys General
Aug 22, 2024 by
CPI
CPI Talks… …With Attorney General Phil Weiser
Aug 22, 2024 by
CPI
The Bipartisan Miracle of State Antitrust Enforcement
Aug 22, 2024 by
Gwendolyn J. Lindsay Cooley
Recent Developments in State Antitrust Enforcement: Agriculture and Food Markets
Aug 22, 2024 by
Elizabeth R. Odette
State Attorneys General: Stewards of Consumer Health and Welfare
Aug 22, 2024 by
Brooke Howlett Lovrovich