MCAI Lex Vision : Letter to State Attorneys General on Compass-Anywhere Merger
Request for State Regulatory Review
I. Introduction
State Attorneys General play a critical role in ensuring that market consolidation does not undermine consumer protection, competition, or community trust. The pending Compass–Anywhere merger is the largest brokerage consolidation in U.S. history, valued at $1.6 billion and encompassing over 340,000 affiliated agents. While presented as a growth opportunity, it raises profound risks to housing transparency, consumer access, and market integrity.
This letter draws on documented evidence of accountability concerns involving Compass, as well as foresight analysis by MindCast AI conducted between July and September 2025, which modeled likely outcomes of the merger. Together, these sources demonstrate the urgent need for state-level review alongside federal oversight.
The request is grounded in both evidence and independent analysis. State action will ensure families and consumers remain protected from practices that erode housing fairness.
MindCast AI LLC is a Bellevue, Washington-based independent AI law and economics firm specializing in predictive analysis and institutional behavior modeling. The firm has extensively tracked Compass’s antitrust litigation strategy and acquisition patterns since early 2025, successfully forecasting the company’s venue fragmentation tactics and co-conspirator allegations before they emerged in federal court filings. As a Washington-based firm with no financial relationships to real estate industry participants, MindCast AI provides cross-jurisdictional analysis unavailable from traditional industry participants or legal counsel.
Contact mcai@mindcast-ai.com to partner with us on law and economic foresight simulations.
II. Background on the Merger
The Compass–Anywhere transaction would create the largest real estate brokerage entity in the United States. Compass is already under scrutiny for its reliance on exclusivity models and aggressive acquisition strategies, and Anywhere carries legacy brands including Coldwell Banker, Century 21, and Sotheby’s. Combined, they will hold disproportionate influence over listings, commissions, and consumer access.
MindCast AI’s foresight simulation concluded that the most probable outcome is approval with conditions, but warned of significant risks: foreclosure of rivals, erosion of transparency, and trust deficits that destabilize consumer confidence. These findings align with heightened Department of Justice (DOJ) and Federal Trade Commission (FTC) interest in real estate commission practices. Compass also faces mounting profitability pressure, having settled lawsuits in 2024 and struggling to demonstrate consistent earnings, which creates incentives to cut corners through aggressive consolidation and litigation.
The MindCast AI analysis is informed by a foresight simulation conducted by MindCast AI between July and September 2025, which modeled regulatory, competitive, and market responses to the proposed merger using Cognitive Digital Twins methodology. The study, provides probability assessments: 65% likelihood of approval with transparency conditions, 20% probability of regulatory blockage, and 15% chance of unconditional approval. It incorporates market data, legal precedent, and stakeholder behavior modeling to forecast likely outcomes and systemic risks. (See MCAI Lex Vision: Antitrust Scrutiny of the Compass–Anywhere Merger, State and Federal Scrutiny of Compass’s Expansion Strategy (September 2025).
The merger is not a routine corporate transaction. Its size, financial pressures, and systemic consequences make state-level scrutiny essential.
III. Risks to Consumers and Competition
Housing markets depend on transparency. Open Multiple Listing Service (MLS) systems allow buyers equal access to listings and ensure sellers can reach the broadest audience. Compass’s strategy of “private exclusives” undermines this transparency, removing homes from the public market and reducing consumer choice.
The company operates what analysts describe as a three-phase exclusivity system. Properties first circulate as “Private Exclusives” only within Compass’s internal network. They may then move to a “Limited Release” stage where Compass selectively shares listings with handpicked partners under strict conditions. Only later are these homes posted publicly, after Compass and its agents have extracted maximum advantage. This staged approach delays open competition and creates information asymmetry that harms both consumers and competitors.
Documented Market Harms
Inventory removal: Compass’s exclusivity system removes 18–22% of luxury inventory from competitive markets during early marketing periods.
Reduced consumer choice: This practice creates an estimated 15% reduction in available housing options for consumers.
Financial impact: Exclusionary tactics cause estimated $50,000+ annual losses for Washington real estate professionals shut out of Compass’s network.
Higher commissions and costs: Restricting access inflates commissions and reduces affordability.
Impact on Stakeholders
Consumers: First-time buyers and protected classes may never see homes held exclusively in Compass’s private network, leading to systematic exclusion.
Sellers: Lose access to the widest pool of buyers, often receiving lower bids due to reduced competition.
Independent brokers: Without access to exclusives, they face systemic disadvantages, reducing diversity and competition in local markets.
Antitrust and Fair Housing Concerns
These dynamics mirror classic antitrust concerns where information asymmetry distorts competitive price discovery.
By controlling when and how listings reach the open market, Compass manipulates supply and demand in ways that favor insiders while eroding fairness.
Ripple effects include higher commissions, restricted housing choice, and diminished consumer confidence.
Discriminatory impacts extend beyond market concentration: exclusives create disparate impact on protected classes under the Fair Housing Act by steering buyers based on corporate affiliation rather than merit.
Without safeguards, the merger will tilt housing markets toward opacity, higher costs, and discriminatory impacts on first-time buyers and protected classes. This is precisely the type of risk state Attorneys General are empowered to prevent.
IV. Accountability Failures
Beyond structural concerns, Compass practices have raised questions of accountability. Reports and public allegations point to patterns of aggressive brand-protection strategies that extend beyond normal business competition. These practices raise concerns about whether Compass can be trusted to expand its market power responsibly. The relevance here is not about personal disputes, but about whether a company with such practices will use greater consolidation to entrench opacity and reduce accountability.
Compass has also adopted litigation strategies that mirror institutional manipulation. The company has filed suits against the Northwest Multiple Listing Service in Washington while suing Seattle-based Zillow in New York federal court—a tactic known as forum shopping. This fragmentation prevents holistic oversight and appears designed to create narrative asymmetry. At the same time, Compass has strategically invoked co-conspirator allegations against other brokerages to pressure competitors without engaging in direct legal confrontation. These maneuvers suggest a deliberate effort to destabilize cooperative market structures that underpin housing transparency.
Documented Practices of Concern
Aggressive brand protection: Reliance on tactics aimed at insulating the company’s brand even at the expense of transparency.
Exclusionary approaches: Practices that may sideline competitors and limit consumer access.
Reputational tactics: Use of strategies that prioritize narrative control over accountability, raising questions about professional standards.
Litigation Strategy
Credibility gap: While suing the Northwest Multiple Listing Service and Zillow for antitrust violations, Compass itself consolidates and restricts listings.
Transparency erosion: Analyses show these lawsuits are part of a broader market strategy to dismantle transparency rules rather than promote competition.
Institutional manipulation: Forum shopping and co-conspirator narratives indicate a deliberate attempt to fragment oversight and weaken industry alignment.
Fraud and Employment Allegations
Compass is also facing fraud allegations from former employees in California who are seeking class-action status. Complaints describe a “bait-and-switch” scheme in which agents were promised signing bonuses, marketing budgets, office space, high commissions, and stock options, only to be denied those benefits after joining the firm. These suits allege violations of California labor and employment laws and claim millions of dollars in lost commissions. (See The CE Shop, Did Compass Con California Real Estate Agents? available at www.theceshop.com/agent-essentials/blog/did-compass-con-california-real-estate-agents.)
Implications for Regulators
Reputation risks and duplicity amplify concerns about market dominance.
Documented patterns suggest systemic issues rather than isolated misconduct.
A firm already facing accountability concerns cannot be trusted to wield greater market power without strict oversight.
State regulators must consider not just theoretical risks but documented patterns of problematic conduct. A firm already facing questions of accountability cannot be trusted to wield greater market power unchecked.
V. Legal Basis for State Action
State Attorneys General have clear authority to intervene in mergers and acquisitions with local market consequences. Compass’s conduct implicates multiple legal frameworks that collectively justify state-level intervention. The company’s litigation tactics, exclusivity practices, and contractual arrangements illustrate systemic risks that go beyond isolated business decisions.
Federal Antitrust
Sherman Act §§1–2 (15 U.S.C. §§1–2): Prohibits agreements in restraint of trade and monopolization.
Clayton Act §7 (15 U.S.C. §18): Addresses mergers that may substantially lessen competition.
Federal antitrust law provides the cornerstone for merger review. Compass’s exclusivity strategies and market concentration trends fall squarely within the scope of these provisions, raising the question of whether the merger substantially reduces competition.
State Antitrust
Washington Consumer Protection Act (RCW 19.86): Provides state-level authority to challenge unfair methods of competition.
Analogous provisions in New York, California, and other states: Offer similar state-level authority for antitrust enforcement.
States have independent enforcement authority to protect their housing markets. Given Compass’s significant presence in high-cost states, local antitrust scrutiny is essential to ensure that residents are not subject to higher costs and reduced transparency.
Civil Conspiracy
Washington case law: Corbit v. J.I. Case Co., 70 Wn.2d 522 (1967) establishes elements requiring agreement, unlawful act, overt act, and damages.
Federal pleading standards: Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) requires factual sufficiency in conspiracy claims.
Allegations of coordinated conduct and exclusionary tactics fit within established civil conspiracy doctrines. The combination of exclusivity practices and litigation strategies shows the kind of agreement and overt acts that courts have scrutinized under these precedents.
Fair Housing
Federal Fair Housing Act (42 U.S.C. §§3601, 3604, 3617): Prohibits discriminatory housing practices and interference with housing rights.
Disparate impact analysis: Upheld in Texas Dept. of Housing v. Inclusive Communities Project, 576 U.S. 519 (2015), confirming liability without proof of intent when practices have discriminatory effect.
Compass’s exclusivity model can result in systematic exclusion of first-time buyers, minority households, and lower-income consumers. By reducing transparency and access, these practices may produce unlawful disparate impact under the Fair Housing Act.
Wage and Labor
State wage statutes: Potential violations through clawbacks and deferred commissions.
Compass’s contract terms raise concerns under state labor protections. These practices may constitute improper withholding of earned wages, an issue squarely within the purview of state Attorneys General.
Compass’s use of clawbacks, commission deferrals, and restrictive contracts may violate state wage statutes, adding another dimension for review. The foresight simulation findings reinforce that Compass’s litigation posture contradicts its consolidation strategy, creating a narrative of bad faith. Compass’s forum shopping—suing the Northwest Multiple Listing Service in Washington while targeting Zillow in New York—demonstrates deliberate venue fragmentation designed to prevent holistic oversight. This tactic aligns with what courts have called “venue shopping,” and regulators should treat it as intentional manipulation of judicial process (see FTC v. Indiana Federation of Dentists, 476 U.S. 447 (1986); Continental T.V. v. GTE Sylvania, 433 U.S. 36 (1977)).
States like Washington, New York, and California—where housing pressures are most acute—have both legal grounds and civic responsibility to act.
The legal framework is already in place. What remains is for state Attorneys General to exercise it vigorously in this high-impact case.
VI. Request for Action
State Attorneys General have both the authority and responsibility to act proactively when mergers create risks to transparency, competition, and housing fairness. The Compass–Anywhere merger implicates multiple statutory regimes at both federal and state levels. Coordinated action across jurisdictions will ensure that consumers, sellers, and smaller brokerages are not disadvantaged by opaque practices.
I respectfully request that your office:
Investigate the Compass–Anywhere merger under state antitrust, consumer protection, and fair housing statutes.
Coordinate with the Department of Justice and the Federal Trade Commission to ensure transparency safeguards are attached to any approval.
Examine Compass’s agent contracts for potential wage law violations.
Consider documented patterns of alleged misconduct in evaluating Compass’s fitness to expand.
Investigate whether Compass’s exclusivity practices disproportionately harm first-time buyers and protected classes, creating fair housing violations consistent with HUD guidance on disparate impact.
These steps would not duplicate federal action but complement it, ensuring local markets and families remain protected. State review adds political weight and localized accountability to a merger with national reach.
Your intervention can safeguard consumers, ensure fair housing, and preserve competitive markets in your state. Without it, Compass’s expansion risks entrenching practices already proven harmful.
VII. Closing
This is not a matter of personal grievance but of systemic risk. Both foresight simulations and documented misconduct show how Compass’s business model threatens transparency, accountability, and family trust. Without strong oversight, the merger will magnify those risks across every major housing market.
For consumers, the risks include higher costs, fewer housing options, and discriminatory impacts that undermine fair housing principles. For competitors, particularly smaller brokerages and independent agents, the risks include exclusion from inventory, reduced ability to compete, and long-term erosion of market diversity. For regulators, the risk is that a precedent will be set allowing corporations to use litigation and consolidation simultaneously to weaken transparency institutions.
MindCast AI’s foresight simulations underscore that these are not hypothetical dangers but predictable outcomes. With a 65% probability of conditional approval, regulators must ensure that those conditions are meaningful and enforceable. If they are not, consumers and competitors will shoulder the costs of reduced transparency while Compass secures unchecked advantages.
State Attorneys General have the authority and responsibility to act. By intervening now, you can ensure consolidation does not erode consumer rights, market transparency, or family protections. This moment requires vigilance, coordination, and decisive action to preserve the integrity of housing markets nationwide.
Thank you for your commitment to protecting fair housing and market integrity.