The National Association of Realtors’ policies for Internet listings are in the national spotlight as the trade group faces an antitrust lawsuit from the U.S. Justice Department filed Thursday.
The Realtors group on Thursday adopted a new policy to try to appease the Justice Department’s concerns that it could restrict industry competition, especially among newer, online brokerage businesses.
To understand how the latest policy and lawsuit came about, Inman News has compiled a timeline of significant events:
Jan. 1, 2002: NAR’s so-called IDX, or Internet Data Exchange, policy went into effect. The rule authorized participating real estate brokers to advertise on their public Web sites the same MLS information on local properties accessible by consumers on the sites of national aggregators like Realtor.com.
Shortly after IDX policies were in place at Realtor-operated MLSs throughout the country, NAR was faced with developing a policy for a new way of displaying listings online, known as virtual office Web sites.
Virtual office Web sites, or VOWs, enable brokers to display more detailed information about for-sale listings in exchange for the consumer’s identity and valid contact information.
May 17, 2003: NAR adopts a policy to address issues specific to listings display on VOWs. The policy contained a controversial selective opt-out clause, which allowed brokers to pick and choose which competitors could display their listings online. It also contained a blanket opt-out provision, enabling brokers to keep their listings from all other brokers’ Web sites.
To view the full text of NAR’s VOW policy adopted May 17, 2003, click here.
The issue has sharply divided the industry. Critics, including Web-based discount realty firms that offer lower commission rates, argue that brokers could misuse or abuse the selective opt-out option in a way that might violate antitrust laws.
Oct. 9, 2003: NAR confirms that the U.S. Justice Department’s Antitrust Division has opened an investigation of the trade group’s latest Web listings policy.
Nov. 10, 2003: NAR postpones implementation of the VOW policy until July 1, 2004, from the original Jan. 1, 2004, implementation deadline in light of the Justice Department investigation.
May 17, 2004: NAR again postpones the deadline for MLSs to implement the VOW policy until Jan. 1, 2005, as the Justice Department investigation continues. The Department gives no indication of how long the investigation might take.
Nov. 8, 2004: NAR extends the implementation deadline to July 1, 2005, as the Justice Department probe continues.
May 11, 2005: NAR meets with Justice Department officials to discuss the pending investigation after reports that DOJ officials were preparing to file an antitrust lawsuit against the trade group.
Meanwhile, NAR Chief Executive Terry McDermott promises to defend the real estate industry against accusations of anticompetitive practices. During a speech at NAR’s Mid-year gathering in Washington, D.C., McDermott reiterated NAR’s position that the opt-out provision of the VOW policy is legal and appropriate, according a report in the trade group’s online magazine. He also said that should the DOJ decide to file a lawsuit to stop the policy, NAR would fight the action in court.
May 14, 2005: In an attempt to resolve the Justice Department investigation, NAR once again delays implementation of its online listings policy and moves forward with plans to create a new policy that it says would be less restrictive and more unified.
Sept. 8, 2005: NAR adopts a new online listings policy, which does not allow for selective restriction of Web listings, but does allow brokers to withhold their listings from all broker Web sites. The new policy consolidates and replaces the VOW and IDX policies to create a single, unified rule governing Internet display of property information originating from the more than 800 multiple listing services owned and operated by Realtor organizations.
A broker who has elected to “opt out” may not reverse that decision for 90 days, according to the rule. The new policy also allows brokers who have opted out of displaying their listings on competitors’ Web sites the chance to make an exception at the direction of a particular seller who wants to have his or her property displayed on the Web sites of all other members of the MLS.
All Realtor-operated MLSs will be required to comply with the new policy by July 1, 2006.
To view the full text of the new online listings policy, click here.
Shortly after NAR released the details of the new policy, the Justice Department filed an antitrust lawsuit, accusing the Realtor group of mandating a policy that obstructs real estate brokers who use “innovative” Web-based systems to offer lower costs to consumers.
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