DOJ and NAR (Realtors) Settle
The Department of Justice and the National Association of Realtors settled today. According to DOJ:
The Department of Justice announced today that it has reached a proposed settlement with the National Association of Realtors (NAR) that requires NAR to allow Internet-based residential real estate brokers to compete with traditional brokers. The Department said the settlement will enhance competition in the real estate brokerage industry, resulting in more choice, better service, and lower commission rates for consumers. NAR has agreed to be bound by a 10-year settlement to ensure that it continues to abide by the requirements of the agreement.In September 2005, the Department’s Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Chicago, against NAR challenging policies and related rules that obstructed real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers. The Department said that the policies prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models. The case was scheduled to go to trial in July 2008 before Judge Matthew F. Kennelly.
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Under the terms of the settlement, NAR will repeal its anticompetitive policies and require affiliated multiple listing services (MLSs) to repeal their rules that were based on these policies. NAR will enact a new policy that guarantees that Internet-based brokerage companies will not be treated differently than traditional brokers. Under the new policy, brokers participating in a NAR-affiliated MLS will not be permitted to withhold their listings from brokers who serve their customers through virtual office websites (VOWs). In addition, brokers will be able to use VOWs to educate consumers, make referrals, and conduct brokerage services. Such brokers will not be excluded from MLS membership based on their business model. NAR will report to the Department any allegations of noncompliance. NAR also has agreed to adopt antitrust compliance training programs that will instruct local Associations of Realtors about the antitrust laws generally and about the requirements of the proposed settlement specifically.
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May 27th, 2008 at 7:51 pm
Finally-
The public no longer will be extorted by this organized crime association known as REALTORS. Now we will have a real choice and not have to deal with these morons who couldn’t get a real job and extort the public for ridiculous fees for doing nothing! A great day for true real estate professionals as well.
May 28th, 2008 at 9:47 am
While I think the settlement has the potential to be a major milestone, I agree with the American Antitrust Institute’s position in the link provided. Namely, that a certain amount of caution is necessary since the settlement does leave room for state legislatures to take away some of the competitive benefits this settlement gives to consumers.
(In the interest of full disclosure, I am AAI Senior Fellow and I worked on the AAI’s Real Estate Competition Project.)