Compass plunges 12% as New York probes antitrust concerns

New York's attorney general is investigating whether Compass's $1.6 billion acquisition of Anywhere Real Estate violated antitrust law, sending shares down 12 percent.

New York Attorney General Letitia James's office is investigating Compass Inc. for potential antitrust violations tied to its $1.6 billion acquisition of Anywhere Real Estate, sending shares down 12 percent to $7.61 on Wednesday.

"The attorney general's antitrust bureau has contacted leaders at several top New York City brokerages requesting information as part of an inquiry into Compass," a person familiar with the outreach told The Real Deal. A spokeswoman for James confirmed the investigation. Compass declined to comment.

Compass stock closed at $7.61, down 11.8 percent, erasing roughly $500 million in market value. The merger, which closed in January 2026, created the largest US residential brokerage with more than 200,000 agents — up from about 40,000 before the deal. An analysis by the Capitol Forum found the combined entity controlled more than 80 percent of transaction volume in Manhattan and Newport Beach, California, levels the publication said exceeded "presumptively illegal thresholds."

The investigation adds regulatory uncertainty for Compass, which already faces criticism over its strategy of encouraging sellers to list properties within its network before making them widely available. If the attorney general finds violations, Compass could face fines or be forced to divest assets. The probe also raises questions about the Justice Department's decision to clear the merger without an extended review after Compass hired Trump-aligned lawyer Mike Davis to make its case.

A Deal That Closed Too Fast

The merger cleared regulatory hurdles sooner than expected after senior Justice Department officials decided against an extended review, the Wall Street Journal reported in January. Gail Slater, then the DOJ's assistant attorney general for antitrust, had wanted to examine potential anticompetitive impacts, but Deputy Attorney General Todd Blanche overruled her after Compass's attorneys appealed directly to his office.

In February, Sen. Elizabeth Warren and Rep. Becca Balint, along with 16 other Democrats, sent a letter to Attorney General Pam Bondi pressing for details about the DOJ's review. The lawmakers cited reports that Slater's concerns were overridden.

Market Share Under the Microscope

The DOJ and FTC's merger guidelines state that a combined market share above 30 percent can "indicate that a merger's effect may be to eliminate substantial competition." Compass and Anywhere together exceeded that threshold in at least a dozen states, according to the Capitol Forum analysis of RealTrends Verified data.

The concentration is particularly acute in luxury markets. In Manhattan, the combined entity controlled more than 80 percent of transaction volume in 2024. In San Francisco, the figure topped 60 percent. Compass's market power has already prompted pushback: Christie's International Real Estate, a Compass brand, recently terminated its franchise agreement with its New York and Northern New Jersey affiliate.

The investigation represents the most significant regulatory challenge to Compass's expansion strategy. With the stock already down 12 percent and legal costs likely to mount, investors face uncertainty over potential penalties or forced divestitures that could reshape the brokerage's footprint in its most important markets.

This article is for informational purposes only and does not constitute investment advice.