Several weeks ago at an industry conference, Compass International Holdings CEO Robert Reffkin threatened to sue MLSs that wouldn’t change their rules. Now, the brokerage giant is taking another 15 of them to federal court.
The company announced Thursday that it is filing 15 federal antitrust lawsuits against MLSs across eight states, accusing the organizations of illegally restricting how agents can publicly market homes outside their systems. Compass alleges that the MLSs unlawfully fine agents for publicly marketing listings outside the MLS, with penalties it says can reach $15,000.
The announcement marks a major escalation in a fight that has been building since September, fueled by demand letters, legal threats and increasingly pointed public messaging from Compass execs. Eight of the 15 MLSs targeted Thursday are already suing Compass in two separate federal cases, adding another layer to an increasingly complicated legal battle.
A Compass spokesperson described the latest lawsuits to Inman as a follow-through on Reffkin’s warnings at the Council of Multiple Listing Services’ annual conference in Fort Lauderdale, Florida, in late September, noting that some MLS organizations had filed their own lawsuits before Compass took legal action.
Compass takes aim at 15 MLSs
The lawsuits target six MLSs in California, three in North Carolina and six others across the country.
California
- bridgeMLS (Oakland)
- Bay East MLS (Oakland)
- Contra Costa MLS (Oakland)
- MLSListings (San Jose)
- The MLS-CLAW (Los Angeles)
- San Diego MLS (San Diego)
North Carolina
- Canopy MLS (Charlotte)
- Hive MLS (Wilmington)
- Doorify MLS (Eastern District of North Carolina)
Other states
- Arizona Regional MLS (Arizona)
- REcolorado (Colorado)
- NorthstarMLS (Minnesota)
- Houston Association of Realtors (Texas)
- Stellar MLS (Florida)
- OneKey MLS (New York)
At the center of the lawsuits are MLS rules that require agents to submit listings to the MLS once they begin publicly marketing a property.
Sellers can generally keep their homes off the MLS through an office-exclusive arrangement. But advertising a property on a brokerage website, social media or other public channels typically triggers a requirement to share the listing with the MLS.
Compass argues that those rules unfairly limit competition and prevent agents from offering alternative marketing strategies, even when homeowners want to advertise their properties outside the MLS first.
“Only the law and the homeowner should tell agents how to market a home, and the MLS is neither the law nor the homeowner,” a Compass spokesperson said in a statement shared with Inman. “Agents should be free to compete on the marketing strategies they offer.”
The brokerage also rejected warnings from MLS leaders that allowing public marketing without requiring listings to be shared through the MLS would harm buyers, sellers or competing agents.
Compass pointed to seven of the nation’s 25 largest MLSs that it said already allow agents to publicly market office-exclusive listings without fines. Those MLSs cover approximately 340,000 agents across 12 states, according to the company.
“If what we are asking for is so bad, why has it worked for years in nearly 30 percent of the country?” the spokesperson said.
MLS leaders counter that their rules are intended to ensure that publicly marketed homes are available to other brokers and their buyers. They argue that agents who benefit from access to shared MLS listings should also contribute their own publicly marketed properties.
California Regional MLS CEO Art Carter, who spent months negotiating with Reffkin before the dispute reached federal court, emphasized that point in a recent interview with Inman.
“At some point, you’ve got to say, this is a cooperative,” Carter said.
Carter also warned that withholding listings from MLS databases could leave appraisers and lenders with incomplete information about home sales, making it harder to determine accurate property values.
The new complaints largely echo arguments Compass made in its Oct. 16 antitrust lawsuit against CRMLS, accusing MLS organizations of restricting competition through their listing rules. In the complaints filed Thursday against MLSs, Compass seeks triple damages and court orders blocking enforcement of the challenged rules.
From demand letters to a nationwide legal fight
On Sept. 8, Compass attorneys sent California Regional MLS a demand letter calling on the organization to stop fining agents for publicly marketing office-exclusive listings. The brokerage gave CRMLS until Oct. 6 to comply, warning that it was prepared to spend millions of dollars on litigation if its demands weren’t met.
Similar letters went to other MLS organizations across the country.
On Sept. 23, Compass International Holdings sent a separate letter demanding that MLS organizations stop sharing its agents’ production and listing data with third-party companies that help competing brokerages recruit agents. The letter specifically identified vendors Courted, BrokerMetrics and Brokerkit as examples of companies using MLS data for recruiting.
Compass argued that information provided to MLS organizations for real estate transactions shouldn’t be used to help competitors recruit its agents. It sought greater control over how that data was distributed, including the ability to exclude information associated with its brokerage brands from feeds used by recruiting companies.
Industry experts who recently spoke to Inman questioned parts of Compass’ argument, noting that MLS data serves purposes beyond recruiting and that access is often governed by agreements with brokerages and technology vendors.
Compass later raised the issue in its October antitrust lawsuit against CRMLS, alleging it lost millions of dollars in commissions after agents were recruited away using data the MLS allegedly sold to competing brokerages.
On Sept. 30, Reffkin took his fight over private listings directly to MLS executives at the Council of Multiple Listing Services’ annual conference in Fort Lauderdale. During a contentious session that drew pushback from attendees, Reffkin warned that Compass would begin filing antitrust lawsuits in mid-October against MLSs that continued fining agents for publicly marketing office-exclusive listings.
Photo by Michael Robert’s from AJ Canaria Creative Services
He said Compass wanted to display listings on its own website without agents facing penalties, while some MLS executives questioned whether the company’s demands went further and could undermine cooperation.
The dispute reached federal court Oct. 5, when CRMLS sued Compass. Compass filed its own antitrust complaint against CRMLS on Oct. 16.
Amid the escalations, tensions and litigation in recent weeks, MLS organizations have also begun raising money to defend their rules in court. CRMLS announced plans for an MLS Cooperation Legal Defense Fund on Sept. 30, while CMLS subsequently announced a separate legal action fund to be run by an independent nonprofit.
In an Oct. 27 interview with Inman, CMLS CEO Jessica Edgerton said the organization had received preliminary financial commitments and was developing a process for reviewing requests for assistance.
The growing dispute has also coincided with changes to how Compass employees participate in industry leadership. On Nov. 9, Inman broke the news that Compass International Holdings had adopted a policy restricting salaried employees from serving in Realtor association leadership positions. The directive came after brokerage managers and other employees were instructed to step down from association leadership roles, including positions some had spent years working toward.
Compass confirmed the policy change, saying it was extending a similar approach previously adopted by Anywhere Real Estate, which merged with Compass earlier this year. The company did not clarify whether exceptions were permitted or whether the restrictions also applied to MLS boards and committees.
Below is one of the 15 federal antitrust complaints filed by Compass against MLS organizations on Thursday. The lawsuits make similar legal arguments challenging restrictions on publicly marketing listings outside the MLS.
