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10/05/2005
| DOJ Files Amended Antitrust Complaint Against NAR The U.S. Department of Justice on Oct. 4 filed an amended antitrust complaint against the NATIONAL ASSOCIATION OF REALTORS®' policies governing the display of listings on broker Web sites, saying the association's new Internet Listing Display (ILD) rules, like its now-rescinded virtual office Web site (VOW) policy, puts Internet-based brokerages at a competitive disadvantage against traditional brokers. NAR strongly backs its policies and says it has no plans to settle the case. "NAR's policies that are under attack by the Justice Department preserve the integrity of multiple listing services, including the vital benefits that MLSs bring to home sellers and buyers and the rights of listing brokers and their customers to direct the marketing of their own properties," NAR said in a prepared statement. "This ill-considered lawsuit jeopardizes the future of the nation's 900 multiple listing services as we know them." In its amended complaint, DOJ says provisions in the new ILD policy that give brokers the ability to unilaterally withhold their listings from display on competitors' Web sites, known as a blanket opt-out, violates antitrust laws. It also finds fault with what it says is an unwarranted exception that allows brokers who have opted out to display their listings on public sites like REALTOR.com. DOJ also cites as anticompetitive ILD provisions it claims "interfere" with certain co-branding relationships between MLS participants and third parties but that, in fact, merely require such co-branding to be not misleading or deceptive. The suit also takes aim at a separate amended NAR MLS rule that defines an MLS participant as a broker who makes offers of compensation to and accepts such offers from other brokers. Prior to the change, an MLS participant had only to be capable of making and accepting offers of compensation. The amended complaint also includes charges made against three other provisions in the prior VOW policy. The first is the ability of brokers to opt-out "selectively" (from competitor Web sites of their choosing). The second is a prohibition on use of other brokers' listings solely for the purpose of collecting and making referrals to other brokers for a fee. And the third is a prohibition on placing third-party advertising adjacent to displays of the listings of other brokers, which DOJ incorrectly asserts applies only to VOWs. Actually, the prohibition could only be imposed if an equivalent restriction was also imposed in the "bricks and mortar" environment, such as when listings are sent to customers via e-mail or fax, or given to a buyer in the office. The VOW policy was intended to regulate online brokerages that aim to replicate bricks-and-mortar brokerage services by letting consumers who register with the site search MLS data directly. NAR has rescinded the VOW policy and is instructing local associations of REALTORS® to continue implementing the national association's Internet data exchange (IDX) policy. The IDX policy, in effect since 2001, regulates brokers' online display of MLS listing data for advertising purposes. The policy was updated earlier this year. Local associations that had adopted and implemented the VOW policy have been instructed to either rescind the policy or refrain from applying and enforcing the provisions targeted as anticompetitive by DOJ: the blanket and selective opt-outs, the referral rule, and advertising prohibitions. NAR has 60 days to respond to DOJ's amended complaint. "A victory by the Department of Justice will drive brokers out of MLSs," NAR says, "resulting in less competition in real estate services, higher costs, [and] less availability of listing information, the very outcome Justice seeks to avoid." Read more about this issue. |
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