The U.S. Justice Department has filed a lawsuit against a broker-operated multiple listing service in Columbia, S.C., charging that the MLS’s rules restrict competition and drive up the cost of real estate services.

The civil antitrust lawsuit, filed Friday in U.S. District Court in Columbia, alleges that CMLS "requires brokers to perform a prescribed set of services, which limits consumer choice, and excludes competitors who might offer innovative options that could provide better services to consumers in that area."

The U.S. Justice Department has filed a lawsuit against a broker-operated multiple listing service in Columbia, S.C., charging that the MLS’s rules restrict competition and drive up the cost of real estate services.

The civil antitrust lawsuit, filed Friday in U.S. District Court in Columbia, alleges that CMLS "requires brokers to perform a prescribed set of services, which limits consumer choice, and excludes competitors who might offer innovative options that could provide better services to consumers in that area."

The announcement was released late Friday, and representatives for the MLS could not immediately be reached for comment. The MLS has about 370 broker members that represent about 3,100 agents in the Columbia area.

MLS rules "prevent members from providing a set of brokerage services that includes less than the full array of services that brokers traditionally have provided — even if a consumer prefers to save money by purchasing less than all of such services," the complaint states, adding that the rules require members to use a standard contract that "prevents its members from offering to a home seller the option of avoiding paying the broker a commission if the seller finds the buyer on her own."

The rules, the DOJ alleges, also "impose unreasonable objective criteria for membership and contain subjective standards for admission to membership that allow CMLS representatives to deny membership to brokers who might be expected to compete more aggressively or in more innovative ways than CMLS’s members would prefer," which DOJ asserts could exclude such brokers or deter them from seeking membership.

Antitrust officials at the Justice Department and the U.S. Federal Trade Commission officials have engaged in a series of actions to oppose rules set by other MLSs that they have deemed to be anticompetitive.

The Federal Trade Commission is pursuing a complaint against a Michigan MLS, for example, over policies that restrict the MLS from sharing of broker-supplied property information with a variety of public-facing Web sites. A federal administrative law judge has found in favor of the Michigan MLS, Realcomp II, in that case, though the full panel of the Federal Trade Commission will consider whether to reverse that decision or uphold it.

The FTC has settled similar charges with several other MLSs.

In October 2007, the Justice Department announced an agreement with another broker-owned MLS in South Carolina — MLS of Hilton Head Island Inc. — over allegations that the MLS passed sought to regulate the price of brokerage services and passed rules that restricted competition. The MLS of Hilton Head Island acknowledged no wrongdoing in that settlement.

In its lawsuit against the Consolidated Multiple Listing Service in Columbia, the Justice Department seeks to permanently block the MLS from engaging in activities such as those alleged in the complaint, and to eliminate its rules that DOJ deems to "unreasonably restrain trade."

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Don’t miss out! Inman Connect Las Vegas starts tomorrow and you can catch all the excitement with a virtual ticket.Register Now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription