Antitrust Law Daily Wrap Up, ANTITRUST—SD Fla: Credit Report Reseller’s Antitrust Claims Against Experian Dismissed , (Dec 11, 2012)

By Jeffrey May, J.D.

Consumer reporting agency Experian Information Solutions, Inc. and credit-report reseller CoreLogic, Inc. were entitled to dismissal of an antitrust action brought against them by a complaining reseller—Credit Bureau Services, Inc., a federal district court in Florida has ruled (Credit Bureau Services, Inc. v. Experian Information Solutions, Inc., December 7, 2012, Rosenbaum, R.). Credit Bureau Services failed to adequately allege that Experian and CoreLogic engaged in a conspiracy or that Experian engaged in monopolization.

Credit Bureau Services, a former customer of Experian, alleged that it closed its mortgage-credit-reporting business because it lacked access on commercially reasonably terms to Experian consumer credit information for use in preparing “tri-merged” reports. Tri-merged reports, which are necessary for underwriting in residential real estate, are specialized credit reports that include consumer credit data from all three of the major consumer reporting agencies: Experian, Equifax, Inc., and TransUnion, LLC.

Credit Bureau Services contended that Experian, in an effort to preserve its monopoly in the tri-merged credit report supply market, entered into a conspiracy with CoreLogic. As a result of the alleged conspiracy, CoreLogic did not enter the market as a fourth consumer reporting agency, thereby maintaining the “tri-merged status quo,” and a number of CoreLogic's competitors were driven out of the business of selling tri-merged credit reports.

Credit Bureau Services alleged that Experian, as part of the agreement with CoreLogic, imposed a new minimum purchase requirement of $60,000 per year and a $5,000-per-month minimum charge on resellers that led to decreased competition for CoreLogic. Experian purportedly offered a data-security explanation for the new requirements imposed on its customers.

The court rejected the allegations of conspiracy. The complaint’s allegations no more plausibly suggested that Experian implemented the new rules for the purpose of buying off CoreLogic from interfering with the three-repository and tri-merged report norm than that it adopted them to increase security for consumer data. Because Credit Bureau Services set forth factual contentions that were at least just as plausibly explained by competition as they were by conspiracy, its Sherman Act, Sec. 1 claims were dismissed.

Monopoly-maintenance claims against Experian also were dismissed. Credit Bureau Services contended that Experian acted to deny resellers reasonable access to Experian consumer credit information in order to maintain Experian’s monopoly in the relevant wholesale market. However, the complaint did not sufficiently allege that Experian’s imposition of a minimum annual fee had the “effect of preventing or excluding competition” in the wholesale report market, according to the court. A separate refusal to deal claim also was rejected.

Transfer of Venue

The court granted the defendants' motion to transfer venue to the Central District of California. None of the operative facts happened in Florida and, if any illegal agreement were reached between Experian and CoreLogic, then it would have occurred in California. Based on the totality of the circumstances, the court found that the interest of justice favored transfer of the action to California.

The case is No. 12-61360-CIV.

Jonathan Laurence Rubin (RUBIN PLLC) for Credit Bureau Services, Inc. Mitchell Wayne Berger (Berger Singerman) for Experian Information Solutions Inc. Dan K. Webb (Winston & Strawn, LLP) for CoreLogic Inc.

Cases: Antitrust FloridaNews