Upstream CEO and President Alex Lange spoke with staffers from the Department of Justice and the Federal Trade Commission on Wednesday, ahead of the company’s May 14 product launch and a joint DOJ-FTC workshop on real estate competition on June 5.
Lange confirmed to Inman that he spoke with staffers from the DOJ and FTC yesterday and has separately spoken with staff attorneys for the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on two other occasions in September 2016 and January 2017, including a trip to Washington, D.C., to answer questions surrounding whether Upstream would violate federal anti-competitive laws.
“The [subcommittee] meeting went as expected. I walked them through what Upstream is, and isn’t,” Lange told Inman. “The governance and funding structures and how broker agreements with vendors and third parties remain unchanged. One of the [subcommittee] attorneys stated: ‘nothing we’ve heard here leads us to believe that there is anything anticompetitive going on.’”
The DOJ and FTC expressed no opinion to him regarding Upstream, Lange said, and seemed primarily concerned with setting the agenda for the June 5 workshop.
Upstream — an online platform that aims to give real estate brokers more control over real estate data, including listings — is set to launch on May 14, according to Lange. The platform will first launch with Regional Multiple Listing Service in Portland, Oregon, with brokers entering data into Upstream and feeding it into other systems, including RMLS, from there — a process called “direct input” that fulfills Upstream’s original aim to become the starting point for data — a role typically held by MLSs now.
But Upstream will also launch in an easier to implement form called “broker direct feed” in which the MLS is the starting point and feeds to Upstream. Arizona Regional Multiple Listing Service (ARMLS) and North Texas Real Estate Information Systems, Inc. (NTREIS) will debut the broker direct feeds first, and Upstream plans to bring onboard five to six new MLSs per month with such feeds.
“Product interest, even before launch, is strong, and we already have brokers under contract approaching 100,000 agents,” Lange said.
David Kully, a former staff attorney in the DOJ’s antitrust division, spoke at an MLS forum hosted by Zillow in Dana Point, California, in late April. He said if he were still at DOJ, he might ask whether Upstream “is something that is going to help facilitate brokers overcoming the competitive forces that have caused them to share data and to change from that.”
“I do not mean to say that the intent of Upstream was to allow brokers to stop competing on where they send listings and to reach a potentially illegal agreement to boycott listings portals, but I wonder whether it might unintentionally have that effect by making it easier for brokers to do so,” Kully said when reached by Inman.
“I haven’t spoken to anyone at the DOJ or FTC about this and don’t know whether this is on their radar screen.”
Real estate giant Zillow Group confirmed that it speaks with government officials regularly and has specifically pointed to Upstream as a company it has concerns about within the real estate ecosystem.
“We have always focused on ensuring that consumer interests are put first, and when competitors band together to develop new ways to unfairly restrict information access, it is anti-competitive and doesn’t benefit consumers,” Zillow spokesperson Kate Downen said in a statement. “We share Upstream’s stated goal of improving the efficiency of listings management.”
“But we also have concerns — which we’ve shared with Upstream — that the system they are building could degrade the quality and timeliness of listings that are distributed, and we don’t believe that would be good for sellers or buyers,” she added.
“Upstream has told us their software will include features to delay listings, send only a handful of fields (such as price, beds and baths), or send only one photo for a listing.”
Lange said he believes those concerns come from a fundamental misunderstanding of Upstream’s platform.
“I think both Zillow’s and Kully’s comments are based on a misunderstanding of Upstream’s features and the intent of the users,” he said. “Brokers are simply trying to be more responsible with their data, especially the data where they have a fiduciary duty to protect their clients.”
As for Zillow’s charge that the software will allow for users to delay listings? Lange said that’s simply untrue. “Originally, the requirements were to give a broker ultimate control over their data. This included limiting the fields if desired. After all, why would you send hundreds of fields to your just listed postcard vendor when all they only need is six?” he said.
“However, as we worked with pilot users, we learned that a simpler approach was what they wanted. To that end, we simplified the vendor configuration.”
Users can configure seven categories, according to Lange:
- Is the distribution to the product/vendor mandatory, or can the agent opt-in or opt-out?
- Should photos be distributed to that product (yes/no)?
- How many years of off-market listings should be distributed to the product?
- What listing statuses should be distributed (active, etc.)?
- What types of listings should be distributed (property class like “residential” versus “commercial,” property type like “single family” verus “multi-family,” and subtype like “apartment,” etc.)
- Should sales information be distributed (yes/no)?
- Should confidential fields be distributed (yes/no)?
“There is nothing anti-competitive about Upstream,” he said. “In fact, it’s just the opposite. It actually distributes data management to the individual fiduciary instead of aggregating control. A broker can only manage their listings, and no data is shared without the broker’s explicit direction even among other licensed brokers. And what is shared has faster access, is higher fidelity, and has no geographic boundaries which benefit everyone.”
Upstream is “not at all” intended to in any way gain leverage over third-party portals, Lange said. “We welcome portals to integrate and get better, high-definition data more reliably.”
Asked whether Upstream would require portals to follow “fair display guidelines” that include not featuring listings or ads for other brokers or agents next to a brokerage’s listing, Lange said, “Absolutely not. Upstream is a platform like Google Drive or [Amazon Web Services]. Data use agreements are between the broker and the vendor (portal) just like they are today. The only agreement between vendors and Upstream covers service levels, outage notifications, etc.”
“Upstream simply provides an ecosystem for the brokers. We don’t/can’t enforce anything. It’s the broker’s data to do with as they wish,” he added.
The DOJ and FTC declined to comment for this story. The FTC added that the agenda for the June 5 workshop has not yet been announced, and therefore, the agency couldn’t speak to whether Upstream will be discussed.
Editor’s note: This story has been corrected to note that Upstream CEO Alex Lange only met with FTC and DOJ staffers on Wednesday and met with Senate subcommittee staffers in 2016 and 2017.