Corporate & Securities Law

DOJ Reaches Settlement with National Association of Realtors Requiring Internet-Based Realtors to Receive Equal Treatment by the MLS

By Matthew S. Wild

On May 27, 2008, the Antitrust Division settled its litigation against the National Association of Realtors (”NAR”) pending in the United States District Court for the Northern District of Illinois. The Antitrust Division explained the nature of challenge as follows: “[t]he first rule challenged by the Department required MLSs to permit traditional brokers to withhold their listings from VOWs [virtual office websites] by means of an ‘opt out.’ NAR does not permit brokers to withhold their listings from traditional broker members of an MLS. Many local MLSs adopted NAR’s policy before NAR suspended its policy during the Department’s investigation. In one market in which the MLS adopted the policy, all brokers withheld their listings from the one VOW in the community, which was then forced to discontinue its popular website. The second rule prevented a broker from educating customers about homes for sale through a VOW and then referring those customers (for a referral fee) to other brokers, who would help customers view homes in person and negotiate contracts for them. Some of the VOWs that focused on referrals also passed along savings to consumers as a result of increased efficiencies.” The consent decree (if approved under the Tunney Act) will require NAR to treat internet-based brokers the same as other brokers on the MLS and rescind these rules. Notably, the Antitrust Division and FTC have been aggressive in promoting competition among real estate brokers. They have obtained a number of settlements against real estate broker associations that had limited the ability of internet brokers to compete and have urged state legislatures not enact legislation that would have the same effect. The press release and proposed consent decree are attached.  NAR (Proposed Consent Decree); NAR (DOJ Press Release)

Full post as published by Antitrust Commentary on May 28, 2008 (boomark / email).