Realtors, DoJ Settle on Internet Broker Rules
Internet-based real estate brokers will have the same access to multiple listing service data as brick and mortar counterparts, subject to technology-neutral limits on displays of listings. A proposed 10-year settlement between the National Association of Realtors and the Justice Department, which requires approval by the U.S. District Court in Chicago, would end a nearly three-year-old legal battle over alleged discrimination against low-cost Internet rivals in the brokerage market. The association said the settlement protects its main goal: limiting access to MLS data to “real estate professionals.”
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Brokers can show clients all properties for sale in a community using the local MLS, a joint venture among brokers. Those who use “virtual office Web sites” often can provide more narrowly tailored services and lower prices to clients than old-school brokers, but only if they have access to MLS data. DoJ sued the Realtors’ association in 2005, alleging that it stifled competition by requiring affiliated MLS listers to let brokers withhold their listings from other brokers’ sites through an “opt out” (WID Sept 9/05 p9).
The settlement says DoJ doesn’t allege that the associations’ Internet Data Exchange Policy in “current form” violates antitrust laws. It bars the group from prohibiting brokers from using virtual office Web sites, restricting their access to listings or charging them above “reasonably estimated actual costs” to list data “a broker is permitted to provide to customers.” By June 1, the association must repeal its Internet Listing Display policy, adopted in August 2005 after two years of negotiation with DoJ, and direct its member boards to do the same. They also must be told to repeal the policy on virtual office sites. The Realtors’ association has until June 1 to adopt the modified policy on virtual office sites approved by DoJ and must deny its insurance coverage to boards that don’t go along. The group also would have to identify those boards to DoJ.
The modified policy says Web-based brokers can provide access to listing data, “but only to consumers with whom the Participant has first established a lawful consumer-broker relationship” under state law. Online brokers must get a registrant’s name and e-mail address and provide a username and password that expire but can be renewed, and keep records for 180 days after expiration. Registrants must agree to terms of use, though they must give permission separately for any financial obligation to the site. Virtual office sites must take “reasonable efforts” to prevent “scraping” of MLS data from their pages.
Most importantly for the association, online brokers can’t display listings when sellers have “affirmatively” told their brokers not to make them available online. Sellers also can tell them to disable a comment feature or estimated market value on their listings. MLSs must provide “non- confidential listing data” only on request by a virtual office site, but they can’t regulate ads on the sites. Nor can they refuse to deal with “affiliated VOW partners” operating Web sites on behalf of brokers.
The association must choose an “antitrust compliance officer” to educate member boards on the settlement, tell DoJ which boards aren’t complying and hold an “annual program” for boards to review antitrust laws.
“When there is unfettered competition from brokers with innovation and efficient approaches… consumers are likely to receive better services and pay lower commission rates,” said Deborah Garza, deputy assistant attorney general for the antitrust division. The association covers more than 80 percent of MLSs in the U.S., DoJ said. “This will ensure that MLSs are used for what they were originally intended to do -- to help real estate professionals find buyers for people who want to sell their homes,” said Laurie Janik, the association’s chief counsel.