Fact: One company controls all property preservation software in the Industry. Fact: Two companies control all inspections in the same Industry. In focus, the US Justice Department sued to block Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks, arguing the tie-up would harm competition. In a complaint filed Thursday, the US said the deal would consolidate the sector from three major players — HPE, Juniper and Cisco — down to two that would control 70% of the market. (HPE’s CEO said the company would defend its planned acquisition). The antitrust suit marks the first brought by the Justice Department under Trump. Building on that, according to documents reviewed by Bloomberg, the Federal Trade Commission is probing whether Uber and Lyft illegally coordinated to limit driver pay in New York City. The companies now must turn over information about an agreement with city officials over how drivers are compensated.
There has been no competition in our Industry, from a software point-of-view, for over a decade. In fact, the only thing that has happened is that Verisk bought out all property preservation software used for work order transit and then increased their pricing. The same holds true for the inspections side in that the only two providers, InspectorADE and EZ Inspections. Adding fuel to the fire is the complete control of API access by National Association of Mortgage Field Services (NAMFS) members which ensures complete isolation. All of this presents as the classic antitrust model.
If even possible, the more concerning item is that while all NAMFS members received massive pay hikes from FHA, HUD and the VA, pricing across the nation for Labor has remained the same. It is not simply that there have not been price increases over the past 30+ years, it is how each and every NAMFS member pays virtually the same for all services. And in a $1.465 billion dollar a year Industry — that number taken for the inflation adjusted amount cited during an Altisource earnings call — these allegations are not simply outliers. One way that Industry leaders are attempting to address this is through the first ever Petition for NAICS. This would allow the Departments of Labor and Education, in conjunction with the Census Bureau, to closely look at pricing issues, employee misclassification issues, as well as antitrust complaints — all under one NAICS.
NAMFS has never made any bones about meeting both at an annual meeting as well as leadership summits to discuss pricing as well as presenting specific guidance for the Industry. Moreover, though, over the past several years, the former NAMFS President, Matt Zoldowski sold the largest property preservation software platform, Property Preservation Wizard (PPW), to Verisk during his original appointment as NAMFS President. Since then, Verisk has been the largest sponsor of NAMFS conferences. Eric Miller, the decades long NAMFS Executive Director, has also been directly involved with Verisk. Above and beyond the conflicts of interest at play here, it is self evident that NAMFS is completely supportive — and overtly supporting — the actions of Verisk. Building on this, the recent trends of National Order Mills buying up their competition — such as the purchase of Five Brothers, M&M Mortgage, GIS Field Services, and others under the roof of Mortgage Contracting Services, controlled by Littlejohn & Co. — is proof positive that the Federal Trade Commission needs to take an extremely close look at our Industry.
In recent years, the United States has witnessed a surge in corporate consolidation, particularly in industries dominated by technology and software. Companies with significant financial resources have engaged in aggressive acquisition strategies, buying up competitors, startups, and complementary businesses to solidify their market dominance. While mergers and acquisitions can drive innovation and efficiency, they also raise significant antitrust concerns, especially when consolidation leads to reduced competition and higher prices for consumers. This article explores the role of antitrust laws in the U.S., the risks of unchecked consolidation, and the broader implications for consumers and the economy.
Antitrust laws in the United States are designed to promote fair competition and prevent monopolistic practices that harm consumers. The cornerstone of U.S. antitrust policy is the Sherman Act of 1890, which prohibits contracts, combinations, or conspiracies in restraint of trade and monopolization. This was followed by the Clayton Act of 1914, which addresses specific anti-competitive practices such as mergers and acquisitions that may substantially lessen competition. The Federal Trade Commission (FTC) and the Department of Justice (DOJ) are the primary enforcers of these laws, tasked with reviewing mergers and investigating anticompetitive behavior.
The goal of antitrust regulation is to ensure that no single company or group of companies can dominate a market to the detriment of consumers. When competition thrives, consumers benefit from lower prices, better quality, and more innovation. However, when consolidation occurs unchecked, it can lead to monopolistic control, allowing companies to raise prices, reduce choices, and stifle innovation.
In the tech sector, consolidation has become a defining trend. Large companies, often referred to as “Big Tech,” have used their vast resources to acquire smaller competitors and innovative startups. For example, companies like Google, Facebook (now Meta), Amazon, and Microsoft have made hundreds of acquisitions over the past two decades. While some of these acquisitions have led to new products and services, others have raised red flags among regulators and antitrust advocates. Verisk, specifically, and potentially InspectorADE and EZ Inspections, should they choose to be purchased or consolidate, fit the bill, as well.
One of the most concerning aspects of this consolidation is the “kill zone” effect, where dominant companies have acquired potential competitors before they can grow into significant threats. This practice not only eliminates competition but also discourages innovation, as startups may be incentivized to sell out rather than compete. Over time, this dynamic can lead to a highly concentrated market where a few players control the majority of the industry. This is currently ongoing when looking at the vulture capitalism ongoing and being deployed by firms like Littlejohn & Co.
When a single company or a small group of companies dominates a market, they gain significant pricing power. Without competitive pressure, these firms can raise prices without fear of losing customers. Conversely, they are able to pay far less as there is no competition to determine wage levels. This is particularly problematic in industries where consumers have few alternatives, such as our Industry, software, cloud computing, or social media platforms.
For example, consider a hypothetical scenario where a dominant software company acquires all major competitors in a specific niche, such as project management tools. After consolidating the market, the company could raise subscription fees, knowing that customers have no viable alternatives. This not only harms consumers but also creates barriers to entry for new competitors, further entrenching the dominant firm’s position.
Despite the clear risks of consolidation, antitrust enforcement in the U.S. has faced significant challenges in recent decades. Critics argue that regulators have been too lenient, allowing mergers and acquisitions that have led to increased market concentration. This lax approach has been attributed to a variety of factors, including limited resources, outdated legal frameworks, and a focus on short-term consumer welfare (such as lower prices) rather than long-term market dynamics.
However, there are signs that the tide may be turning. In recent years, the FTC and DOJ have taken a more aggressive stance on antitrust enforcement, particularly in the tech sector. For example, the FTC has filed lawsuits against Facebook and Google, alleging anti-competitive practices and seeking to unwind past acquisitions. These cases signal a renewed focus on preserving competition and preventing monopolistic behavior.
The consequences of unchecked consolidation extend beyond higher prices for consumers. When a few companies dominate an industry, they can also exert significant influence over labor markets, supply chains, and even political processes. For instance, dominant firms may suppress wages by reducing competition for talent or use their market power to dictate terms to suppliers and partners.
Moreover, consolidation can stifle innovation by creating barriers to entry for new players. Startups and small businesses are often the drivers of technological advancement, but they may struggle to compete in a market dominated by a few large firms. This dynamic can lead to a stagnation of ideas and a slowdown in economic growth.
To address the challenges posed by consolidation, policymakers and regulators must take a proactive approach to antitrust enforcement. This includes updating legal frameworks to reflect the realities of the digital economy, increasing funding for enforcement agencies, and adopting a broader definition of consumer welfare that considers long-term market health. One potential solution is to impose stricter scrutiny on mergers and acquisitions, particularly those involving dominant firms and potential competitors. Regulators could also explore structural remedies, such as breaking up companies that have become too powerful or imposing conditions on mergers to preserve competition.
Additionally, there is a growing call for legislative action to modernize antitrust laws. Proposals such as the American Innovation and Choice Online Act aim to prevent dominant platforms from favoring their own products and services over those of competitors. These efforts could help level the playing field and promote a more competitive marketplace.
The rise of consolidation in our Industry, particularly in the tech sector, inspections, and field services, poses significant risks to competition, innovation, and consumer welfare. While antitrust laws provide a framework for addressing these issues, enforcement has often fallen short in recent decades. As dominant companies continue to acquire competitors and raise prices, it is imperative that regulators, policymakers, and the public take action to preserve a fair and competitive economy. By strengthening antitrust enforcement and modernizing legal frameworks, the U.S. can ensure that markets remain dynamic, innovative, and beneficial for all.