The U.S. Justice Department today amended the complaint in its antitrust lawsuit against the National Association of Realtors, charging that the group’s modified online property listings policy prevents Internet-based real estate brokers from offering lower costs to consumers.
The antitrust lawsuit was first filed on Sept. 8, and alleges that the trade group’s policies limit competition from Internet brokers and threaten to inflate prices in the industry.
The same day the Justice Department filed the lawsuit last month, the Realtor trade group made public a new online listings policy to address the department’s concerns stemming from a two-year probe of NAR’s previous listings display rule.
The old policy, dubbed the Virtual office Web site or VOW policy, allowed real estate brokers to selectively hold their listings from competitor’s Web sites, a move that DOJ officials have said threatens competition in the marketplace.
NAR’s new policy no longer allows brokers to pick and choose which of their competitors is allowed to display their listings, but it does enable them to withhold listings from all brokers in the multiple listing service. Brokers who withhold their listings from other sites will not be allowed to display other brokers’ listings on his or her own site, according to the policy. And a broker who has elected to “opt out” may not reverse that decision for 90 days.
The modified policy exempts the trade group’s official Web site, Realtor.com, from the blanket opt-out.
NAR today said its policies preserve the integrity of MLSs, including the benefits the organizations bring to home sellers and buyers and the rights of listing brokers and their customers to direct the marketing of their properties.
“This ill-considered lawsuit jeopardizes the future of the nation’s 900 multiple listing services as we know them. A victory by the Department of Justice will drive brokers out of MLSs, resulting in less competition in real estate services, higher costs, less availability of listing information, and the very outcome Justice seeks to avoid,” NAR officials said.
Many of the changes made from the previous policy were in direct response to concerns the Justice Department raised over the course of its two-year investigation, NAR has previously said.
The trade group also has said the “blanket opt-out” provision provided in the new policy has been in effect by “hundreds of MLSs” for three and a half years under NAR’s policy for Internet Data Exchange. The association has said the policy has been widely accepted by the industry and very few brokers have chosen to opt out.
NAR’s new policy announced in September also refines requirements for being an MLS member, and prohibits licensed real estate brokers from joining a multiple listing services if they don’t list or sell properties.
“This membership policy effectively forbids Internet-based brokers from referring their customers to other brokers for a fee,” the Justice Department said in its amended complaint.
“Last-minute changes by NAR did not fix the anticompetitive problems of its policy,” J. Bruce McDonald, deputy assistant attorney general in the Department’s Antitrust Division, said today. “When buying and selling a home, consumers should receive the full benefits of competition – better services and lower costs. NAR’s modified policy continues to prevent consumers from realizing these benefits.”
The amended complaint was filed in U.S. District Court for the Northern District of Illinois Eastern Division.
NAR General Counsel Laurie Janik during a Webcast Wednesday urged MLSs not to adopt the new policy for Internet listings display until the lawsuit with the Justice Department has been resolved, according to Realtor Magazine online report.
Janik advised MLSs to continue enforcing the existing Internet Data Exchange policy and to stop enforcing the VOW policy’s blanket and selective opt-out provisions, the rule that restricts advertising around listings, and the provision prohibiting VOW operators from using their sites solely to collect referral fees, according to Realtor Magazine.
The Realtor Magazine report also said that NAR has no plans to settle the case.
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