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DOJ Files Lawsuit Against Realtor Group Over Web Listings Access

Source: U.S. Department of Justice

The Justice Department filed a lawsuit against the National Association of Realtors (NAR) last week, challenging a policy that it claims curbs competition from online real estate brokers. The Department said that NAR's policy prevents consumers from receiving the full benefits of competition and threatens to lock in outdated business models and discourages discounting.

"The purchase of a home is one of the most significant financial decisions a family can make, and NAR's policy stifles competition to advantage some of its members at the expense of home buyers and sellers across the country," J. Bruce McDonald, Deputy Assistant Attorney General in the Department's Antitrust Division, said. "Consumers benefit when real estate brokers are free to compete vigorously by offering innovative services."

In a statement, the National Association of Realtors said it was "shocked and disappointed" in the Justice Department's decision to sue them after several discussions over a policy it claims no longer exists.

The new ILD policy consolidates and replaces both the VOW policy and NAR's Internet Data Exchange (IDX) policy to create a single, unified policy governing the Internet display of all property information originating from the more than 800 multiple listing services owned and operated by Realtor(R) organizations.

Under the new policy, all MLS property listing data available for display will automatically be available to all MLS members unless a member notifies the MLS in advance that he or she does not want to participate (opt out) in Internet Listing Display. In that case, none of the listings he or she enters into the MLS will be available for display on other brokers' Web sites nor will he or she be allowed to display other brokers' listings on his or her own Web site.

In its complaint, the Department alleges that NAR's policy restrains competition by requiring NAR-affiliated MLSs to adopt rules that will allow brokers to withhold their clients' listings from other brokers' websites by means of an "opt out." In essence, NAR's policy enables traditional brokers to block their competitors' customers from having full on-line access to all of the MLS's listings, the Justice Department contends. When exercised, the opt-out provision prevents web-based brokers from providing all MLS listings that respond to a customer's search, effectively inhibiting the new technology, the Department said.

Delivering listings over the Internet gives web-savvy consumers more control over their search for a home, allowing them to educate themselves about their options at their own pace and on their own time. This allows brokers to reduce the time that their agents spend searching the MLS database or showing homes the customer dislikes, the Department said. Because the Internet can be used to deliver brokerage services more efficiently - resulting in better service and lower costs to consumers - brokers who utilize the Internet represent a competitive challenge to traditional brokers, the Department added.

"NAR's policy significantly alters the rules that govern MLSs by permitting traditional brokers to discriminate against other brokers based on their business model, denying them the full benefits of MLS participation," Department said.

The lawsuit seeks to ensure that traditional brokers, through NAR's policy, cannot deprive consumers of the benefits that would flow from these new ways of competing.

Read Full Story at U.S. Department of Justice

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