Markets Wired

Red Ventures and Bankrate have agreed to a divestiture of Bankrate’s Caring.com business unit to settle Federal Trade Commission charges that their $1.4 billion merger would likely harm competition in the market for third-party paid referral service for senior living facilities.

According to a complaint filed by the FTC, Red Ventures and Bankrate supply proprietary internet content and customer leads for a variety of industries. Caring.com is a wholly-owned subsidiary of Bankrate which competes in the market for third-party paid senior living facilities referral services. Two of Red Ventures’ largest shareholders jointly own A Place for Mom.com; the largest provider of such services, and Caring.com is the second largest provider.

According to FTC’s complaint, Caring.com and A Place for Mom.com are each other’s closest competitors, competing for national and local business. Other competitors in the U.S. market for third-party paid referral services for senior living facilities comprise a much smaller fringe.

The complaint alleges that the two Red Venture shareholders have the collective ability to significantly influence management of Red Venture and Caring.com. Thus, if consummated, the transaction may increase the chance for Red Ventures to unilaterally exercise market power and the potential for coordinated interaction between Caring.com and A Place for Mom.   

Under the terms of the proposed settlement, the parties will divest Caring.com no later than six months after the acquisition and provide transition services to an acquirer. Under the proposed order, the Commission may appoint a monitor to ensure compliance. The parties are also required to establish firewalls related to Caring.com’s confidential business information.

Further details about the consent agreement are set forth in the analysis to aid public comment for this matter.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 2-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Dec. 5, 2017, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.  

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $40,654.

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