(The Center Square) – Florida issued a civil subpoena this week to credit scoring company FICO as part of an investigation into suspected anticompetitive practices.
Over 90% of U.S. lending decisions are made using FICO scores. The company issues as estimated 27 million credit scores every day and plays a major role in Floridians’ purchases of homes and cars.
The subpoena seeks an array of documentation to determine if FICO has violated the Florida Antitrust Act by engaging in anticompetitive conduct.
Documents requested include internal assessments of market share and competitive position versus other competitors, license agreements and contracts with major credit bureaus to include royalty rate negotiations, pricing tiers, and “no equivalent products” clauses, communications with credit bureaus about competitors, and a comprehensive look at all pricing histories and changes for FICO scoring products.
It also seeks details on FICO’s competitors, antitrust compliance personnel and training and internal antitrust reviews.
“Floridians deserve fair access to credit-not a system controlled by one company that repeatedly jacks up prices and blocks competition,” said Attorney General James Uthmeier. “These skyrocketing costs are passed directly to consumers, making it harder for families to buy homes, finance cars, and secure essential services. My office will not tolerate monopoly abuse that harms Florida families.”
Uthmeier’s office said FICO has dramatically increased its prices in recent years from below $1 per score to up to $10. FICO also faces accusations of predatory pricing, illegal product bundling and exclusionary contracts to block the competition.
FICO has until August 5 to comply with the order.
It’s not the first time FICO has come under scrutiny. A business to business class action was brought against the company by a group of banks, credit unions, and other plaintiffs alleging FICO has violated antitrust law and maintained a monopoly through suppression of the competition.
The U.S. Department of Justice opened a civil investigation into antitrust claims against the company in 2020.
The company said in a statement at the time it was confident the DOJ would conclude it had not engaged in exclusionary conduct.
“Lenders have multiple choices of analytic models to use in credit decisioning and are free to choose the credit score that works best for them. In a competitive marketplace, the FICO Score is chosen because it is trusted to be independent, predictive and reliable, and because FICO is constantly innovating to enable lenders to responsibly extend access to credit,” the statement read.
