A large multiple listing service in Washington allegedly is attempting to control real estate listings in the state and has worked to drive out other MLSs, according to an antitrust complaint filed with the Federal Trade Commission this week.
A large multiple listing service in Washington allegedly is attempting to control real estate listings in the state and has worked to drive out other MLSs, according to an antitrust complaint filed with the Federal Trade Commission this week. Officials at Northwest MLS, which is the focus of the complaint, say the matter is a “misguided” reaction to new competition.
The complaint, filed on behalf of the Bellingham-Whatcom County MLS, which serves 69 brokerages and 854 licensees in the northwest corner of Washington, alleges that the larger Northwest MLS “has intentionally interfered with the ability of non-Northwest members to compete for listings.”
The complaint also states that “the only reasonable conclusion is that Northwest (MLS) is intent on driving the Bellingham-Whatcom County (MLS) out of business,” and questions whether the Northwest MLS is in compliance with an FTC consent order issued in 1990.
The Northwest MLS has engaged in a pattern of expansion that has led to the demise of several independent MLSs, said Tom Resick, a lawyer who is representing the Bellingham-Whatcom County MLS. The complaint alleges that in the past eight years, “Northwest has absorbed at least 10 formerly independent listing services in the state. It has now identified Bellingham-Whatcom County as its next target.”
Also according to the complaint, Northwest MLS announced on June 30 that it would consolidate all listing services in Western Washington and also gave notice that Bellingham members would be barred from posting or receiving listings through a reciprocal listings program called Washington Information Network.
That network, a nonprofit association of MLSs throughout Washington, for the past decade had “enabled brokers and agents to view Northwest’s listings and vice versa. The program benefited all listing services, their respective broker members, and the public,” the complaint alleges.
Resick said Northwest MLS acquired the Washington Information Network several years ago but continued to operate it free to everyone until this year, and this has posed a “very real concern” for the Bellingham-Whatcom County MLS. He said that there appears to be an “anticompetitive thrust” to the behavior of Northwest MLS.
Jeff Coop, legal affairs manager for Northwest MLS, said the Washington Information Network was discontinued about three years ago, and Northwest MLS “knows of no law, agreement, or decision that requires it or any other (MLS) or association to give free access to its data and services to non-members.”
Coop also said that the expansion of Northwest MLS is part of a trend “seen across the country with other regional multiple listing services.”
The complaint alleges that three regional brokerages – Coldwell Banker, Windermere and John L. Scott – “control Northwest’s board,” and that Northwest MLS officials offered “an exclusive, unprecedented deal to three Bellingham brokerages – Coldwell Banker, Windermere and John L. Scott” to receive “unlimited free access to Northwest’s listings for over 24 months.”
Chris Osborn, a lawyer for broker-owned Northwest MLS, said the complaint appears to be “motivated by misguided protectionism” and he questioned how “overt competition” with another MLS represents anti-competitive behavior.
Northwest MLS serves 1,283 real estate brokerages and 17,000 sales associates. Membership has more than doubled in the past decade.
The MLS opened its 13th satellite facility in Bellingham last month and already has attracted more than half of Whatcom County’s real estate agents to join, according to a statement issued yesterday by Northwest MLS. Originally based in the Puget Sound region, Northwest MLS has since grown to serve most of Western Washington and the Interstate-5 corridor.
Jack Johnson, Northwest MLS president and CEO, said, “For the first time in its history, the Bellingham-Whatcom County Multiple Listing Service has competition for the patronage of Whatcom County real estate agents’ listings.” He also said it is “outrageous” for Bellingham-Whatcom County MLS officials to suggest that Northwest MLS has violated “any term of our agreement with the FTC.”
The FTC order, issued in August 1990, states that the Puget Sound Multiple Listing Association, which is now known as the Northwest MLS, is prohibited from “adopting or maintaining any policy, or taking any other action that has the purpose, tendency, or effect of restricting or interfering with the solicitation of a listing agreement for any property.”
Osborn said that Northwest MLS has communicated regularly about the 1990 order “for several years,” and “it has never been suggested that (Northwest MLS) has not fully complied with the agreement.”
In the current complaint, the Bellingham-Whatcom County MLS seeks a new FTC investigation of Northwest’s conduct. The complaint also calls for a reinstatement of the Washington Information Network program.
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