Rent-to-Own Franchisor Operators Settle Charges that They Restrained Competition through Reciprocal Purchase Agreements in Violation of Antitrust Laws
FTC alleges that agreements by Aaron’s Inc., Buddy’s Newco, LLC, and Rent-A-Center, Inc. reduced competition, lowered quality and selection of products
February 21, 2020 – FOR RELEASE
The FTC antitrust complaints alleged that from June 2015 to May 2018, Aaron’s, Buddy’s, and Rent-A-Center each entered into anticompetitive reciprocal agreements with each other and other competitors, and that these agreements swapped customer contracts from rent-to-own, or RTO, stores in various local markets, whereby one party to the agreement closed down stores and exited a local market where the other party continued to maintain a presence, such that these reciprocal agreements likely led to store closures that may not have occurred otherwise, resulting in reduced competition for quality and service in the remaining stores.
These anticompetitive practices, according to the FTC, caused likely caused many travelers to have to travel to the next-closest location to make their in-person payment, which may have significantly increased their travel time and costs. Further, these wrongful agreements also explicitly required the selling party not to compete within a specified territory, typically for a period of three years.
“These agreements affected consumers who already had few options for furnishing a home on a limited budget,” said Ian Conner, Director of the FTC’s Bureau of Competition. “The FTC’s orders get rid of the agreements, reopen affected markets to competition, and bar these companies from doing this again.”
