A brokerage company that offers flat-fee listing services seeks to expand a proposed settlement agreement between the U.S. Justice Department and the National Association of Realtors to cover a popular type of online data-sharing agreement among brokers known as Internet Data Exchange, or IDX.
NAR officials, though, are quick to point out that the proposed settlement agreement does not impact the group’s IDX policy, which provides rules for the online sharing and distribution of property listings information among brokers who are members of NAR-affiliated multiple listing services.
The proposed settlement agreement announced in late May focuses on NAR policies for a separate form of data exchange among brokers, known as the Virtual Office Web site, or VOW, policy, and specifically states that the federal government does not allege any antitrust violations with the IDX policy — though managers at MLS4Owners.com want the court to revisit this issue by striking a brief mention of the IDX policy from the proposed final judgment in the settlement agreement.
That proposed final judgment states, "The United States does not allege that (NAR’s) Internet Data Exchange (IDX) Policy in its current form violates the antitrust laws."
Christopher C. Nye, president of Washington state-based MLS4Owners.com, and Kenneth R. Whitney, general manager for the company, state in their formal comments to the federal government in response to the proposed settlement that they believe NAR’s IDX and VOW policies "are two sides of the same coin" and that the "IDX policy will harm sellers."
Also, MLS4Owners charges in its comments that the intent of the Justice Department in its lawsuit against NAR was to "enjoin (the association) from maintaining or enforcing policies that restrain competition from brokers who use the Internet to more efficiently and cost effectively serve home sellers and buyers, and from adopting other related anticompetitive rules," as stated in the Justice Department’s amended complaint, filed in October 2005.
Nye told Inman News today that by simply omitting the paragraph in the proposed final judgment that makes mention of the IDX policy, he believes that the settlement agreement would have a broader impact and would force NAR to make changes to its IDX policy as well.
But Ralph Holman, associate general counsel for NAR, said that the Justice Department has known about the provisions in the IDX policy and that the proposed settlement agreement "is not a challenge to IDX policy."
MLS4Owners managers, in their comments to the federal government, call attention to a provision of NAR’s MLS policy that was most recently changed in November 2006 — after the Justice Department filed its lawsuit — which provide that MLS participants may independently "select the listings they choose to display on their IDX sites based only on objective criteria" that can include factors such as location, list price, property type (single-family, condominium or multifamily, for example), compensation offered by listing brokers, and type of listing (such as exclusive right to sell or exclusive agency) or the "level of service being provided by the listing firm."
Nye said an important difference between the proposed VOW policy with existing IDX policy is that operators of VOWs can put all brokers’ property listings on a Web site unless sellers specifically choose not to publicly share their home information, while IDX policy allows brokers to "stop my listings from being on their Web site" based on criteria such as service level, which he believes is anticompetitive.
That MLS policy that allows brokers to choose to exclude some listings from appearing on their Web sites, because it relates specifically to IDX policy and does not relate to VOW policy, is outside the scope of the settlement agreement, Holmen noted.
"We’re hoping that the judge takes a hard look at this," Nye said. Eliminating mention of IDX policy in the proposed judgment "would save a lot of headaches down the road," he said.
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