Opendoor’s deceptive business

“On December 23, 2020, the Federal Trade Commission (“FTC”) notified the Company that they intend to recommend that the agency pursue an enforcement action against the Company and certain of its officers, if the Company is unable to reach a negotiated settlement acceptable to all parties. This notice is related to an initial FTC civil investigative demand sent to the Company in August 2019 seeking documents and information relating primarily to statements in Opendoor’s advertising and website comparing selling homes to Opendoor with selling homes in a traditional manner using an agent and relating to statements that Opendoor’s offers reflect or are based on market prices. The Company is engaged in settlement negotiations with the FTC and has accrued an immaterial amount for this matter. Any settlement could result in material monetary remedies and/or compliance requirements that could have a materially adverse impact on its financial results. The Company cannot make an estimate of the possible loss or range of loss incremental to the amount accrued, if any, resulting from negotiations with the FTC at this time.” Source: Opendoor Technologies Inc. FORM 10-Q August 11, 2021

The bigger question remains about the Opendoor Brokerage where “In certain of our service areas, if you use an Opendoor Agent or Opendoor Partner Agent to purchase a home, you can save up to 1% off the purchase price of the home in the form of a commission refund at closing. The amount is subject to a minimum commission to your agent of $3,000, which means it is calculated as the lesser of either (a) 1% of the price of the property you buy, or (b) your agent’s commission minus $3,000. It may also be reduced on the basis of purchase type (e.g., short sale), loan restrictions, seller contributions, or law” a #pricefixing scheme where Opendoor Partner Agent does not set their own rebates and operates by means of consumer allocation between licensed brokers.

Unlike deceptive business adverting, #pricefixing violation of the Sherman Act is a felony punishable by, for corporations, a fine of up to $100 million, and for individuals, a fine of up to $1 million or 10 years’ imprisonment, where Eric Wu could be convicted to spend the next ten years in a federal prison. But will he? Thus far, #pricefixing in #ecommerce remains the number one, highly profitable, enemy of #openecommerce

#realestate #realtors #ibuyers #trainwreck #antitrust #respa #shermanact #ftcact U.S. Department of Justice Consumer Financial Protection Bureau

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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