Inside CoStar’s aggressive strategy
Konrad Putzier, David Jeans, Christian Bautista and Nancy C. Carvajal of The Real Deal examine CoStar Group, the company that has been expanding its real estate news operation across the country, and its aggressive strategy.
Putzier, Jeans, Bautista and Carvajal write, “At the core of CoStar’s business is a detailed database of commercial properties — size, tenants, photographs and rents. It has long seen itself as the Bloomberg of commercial real estate, and in recent years expanded into the residential space with the acquisitions of Apartments.com and ForRent.com.
“Yet to defend its turf, CoStar has gone to extremes, well beyond other information giants similarly vulnerable to data theft. Since the 1990s, CoStar has filed at least 33 federal copyright-related lawsuits against individuals, customers and competitors, from small data shops to multimillion-dollar companies. Bloomberg, for example, has filed no federal copyright-infringement lawsuits, though Reis, a real estate data company founded in 1980, has filed at least 11 lawsuits against people and companies it accused of using its service without paying.
“For this story, The Real Deal interviewed dozens of CoStar’s customers, competitors, former employees, lawyers and industry experts, some of whom spoke on condition of anonymity. An examination of CoStar’s litigation history indicates that the company uses a playbook of aggressive lawsuits and public-relations warfare against its rivals. As will be seen, its tactics can push them to the brink of collapse or weaken them enough to make them soft targets for an acquisition.
“‘They’ve used litigation to suppress innovation in the space,’ said Elie Finegold, the former head of global innovation and business intelligence at CBRE, the world’s largest commercial brokerage and one of CoStar’s biggest customers. ‘And over time, they have cultivated an adversarial approach to customers.'”
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