The Federal Trade Commission (FTC) has reached an agreement with Intercontinental Exchange (ICE) and Black Knight to address antitrust concerns arising from ICE's $13.1 billion acquisition of Black Knight, the FTC said in an Aug. 31 press release.

“This deal as originally structured would have reduced competition in key areas of the mortgage origination process, raising costs for lenders and homebuyers,” Henry Liu, director of the FTC’s Bureau of Competition, said in the release. “To address these concerns, the Commission’s order provides structural relief and a variety of tools to preserve competition in these critical markets.”

The proposed settlement mandates the divestiture of Empower and Optimal Blue, two essential businesses within the mortgage origination process that are currently operated by Black Knight, the FTC said in the release. The agreement includes additional measures to ensure the success of these divested businesses, the release said.

The proposed consent order stems from FTC allegations that the ICE and Black Knight merger, which combines two leading mortgage technology providers, would lead to increased costs, reduced innovation, and limited options for lenders in terms of mortgage origination tools. Black Knight's Optimal Blue and Empower businesses and related products will be divested to Constellation Web Solutions Inc., a provider of mortgage-related tools and software. ICE and Black Knight are obligated to maintain the viability of these businesses until they are successfully divested to Constellation and provide transition assistance to ensure their continuity, the release said.

The proposed consent order also imposes a 10-year requirement for ICE and Black Knight to seek prior approval from the FTC before reacquiring any divested asset or acquiring an interest in a loan origination system (LOS) business. It also mandates prior notice to the FTC before acquiring an interest in a product, pricing, and eligibility engine (PPE) business for the same duration, the release said.