U.S. Lawsuit vs. National Association of Realtors Online Listing Policy Is Being Settled (5-27-08)

The U.S. antitrust lawsuit filed against the National Association of Realtors in 2005 has reached a proposed settlement, May 27, 2008, that calls for the adoption of a new online listings policy.

The lawsuit had challenged the NAR policies governing the online sharing and display of property listings, including Virtual Office Web site (VOW) and Internet Listings Display (ILD) policies.

Other data-sharing policies for multiple listing services and participants, known as Internet Data Exchange (IDX) policies, were not challenged in the lawsuit and are not affected by the proposed settlement.

The Justice Department had alleged that NAR's policies could restrict competition and consumer choice in real estate services, that those policies would discourage low-cost services.

The DOJ had challenged the NAR requirement that multiple listing services permit brokers to selectively withhold property listings from companies that operate VOW-based search sites that feature a collection of property listings from MLS members.

The proposed settlement provides that the display of listing information on a VOW site does not require separate permission from the participant whose listings will be available on the VOW. However, it does provide that individual sellers can choose to block information about their home from display on the Internet.

The DOJ said that the MLSs that had adopted policies in violation of the settlement proposal must rescind those rules. The DOJ reports that 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 Web sites.

Another rule challenged by Justice Department related to restrictions in using VOW sites as a source of referral fees from other brokers. The proposed settlement provides that an MLS may not prohibit, restrict, or impede a participant from referring registrants to any person or from obtaining a fee for such referral.

The NAR position is that all members of MLS must be actively engaged in the act of real estate buying and selling, which prevents MLS members from joining an MLS specifically to "scrape" property listings from other members.

The proposed settlement is not yet final. It will be published in the Federal Register and is subject to a 60-day comment period and a 30-day review by a judge. NAR must adopt the modified VOW policy within five business days of the final judgment on the settlement agreement.

Posted by Harrison K. Long, Explore Properties Group, May 28, 2008
Source: settlement proposal (United States v. National Association of Realtors, May 27, 2008)