Fidelity to Sell Title Plants to Settle FTC Charges
July 20, 2010
Fidelity National Financial will sell several title plants and related assets in the Portland, Oregon, and Detroit, Mich., metropolitan areas, and in four other Oregon counties to settle Federal Trade Commission charges that its 2008 acquisition of three LandAmerica Financial subsidiaries was anticompetitive.
According to the FTC, Fidelity’s acquisition of the LandAmerica assets was anticompetitive in several local markets for the provision of title insurance information services by title plants.
Fidelity had cleared all regulatory hurdles two years ago when it acquired Commonwealth Land Title, Lawyers Title and United Capital Title after LandAmerica filed bankruptcy. The deal was approved by the Nebraska Department of Insurance, and no objections were filed by the FTC during the 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The FTC’s complaint charges the acquisition reduced competition in six geographic areas: 1) the Portland, Ore., metropolitan area, consisting of Clackamas, Multnomah, and Washington counties; 2) Benton County, Oregon; 3) Jackson County, Oregon; 4) Marion County, Oregon; 5) Linn County, Oregon; and 6) the Detroit, Mich., metropolitan area consisting of Oakland, Macomb, and Wayne counties.
In the Portland area, the complaint alleges the acquisition left Fidelity with a controlling interest in the title plant that is the sole provider of title insurance information services. In the three other Oregon counties, the acquisition reduced the number of independent title plants from four to three.
In the Detroit metropolitan area, the FTC contends the acquisition may give Fidelity the power to affect the competitive significance of Data Trace, an independent title services provider, and the only firm in these counties other than Fidelity with a complete and up-to-date title plant.
The FTC’s proposed settlement order will replace the competition lost through Fidelity’s acquisition of LandAmerica’s title insurance subsidiaries. First, it requires Fidelity to sell part of its ownership in the joint title plant in Portland, Oregon, to Northwest Title. This will ensure Fidelity does not own a majority of the only title plant serving the Portland market.
Second, it requires Fidelity to sell a copy of the data from each of the title plants serving Oregon’s Benton, Jackson, Linn, and Marion counties to Northwest Title. This will restore the number of independent title plant owners in each county to four – the same number as before the acquisition.
Third, the proposed order requires Fidelity to sell a copy of the title data in the three Detroit-area counties that LandAmerica provided to Data Trace before the acquisition to an FTC-approved buyer. This will limit Fidelity’s ability to affect the competitive significance of Data Trace, an ability that Fidelity gained through its acquisition LandAmerica’s assets.
Finally, the order requires Fidelity to notify the FTC before acquiring 50 percent or more of any joint title plant in California, Colorado, Nevada, New Mexico, Oregon, and Texas – states where Fidelity’s acquisition of LandAmerica’s subsidiaries has increased Fidelity’s ownership interest in title plants.
The FTC vote approving the complaint and proposed settlement order was 5-0. The order will be subject to public comment for 30 days, until August 16, 2010, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. To submit a comment electronically, please click on: www.ftc.gov/opa/2010/07/fidelity.shtm