Justice Dept Investigation of REALTORS Focusing on MLS Online Listings

Antitrust concerns at issue

October 13, 2003

By PATRICK CROWLEY

The department did not issue a formal statement, and Talamona was careful not to mention the NAR by name during a brief phone interview Thursday afternoon.

“The Antitrust Division is investigating the potential competitive impact of certain rules involving the display of residential real estate listings data over the Internet,” Talamona said before refusing to make any additional comments or take any further questions.

NAR Vice President of Public Affairs Steve Cook confirmed the investigation in an interview Thursday.

The government has not subpoenaed records or individuals but did request documents in September through what Cook called a “civil information demand.”

“They asked for anything that addressed our Internet data displays from Jan. 1, 2000,” Cook said. “We are complying with all the information they want.”

Cook said the probe was focused on online multiple listing services and not online advertising. He would not answer additional questions, nor would he speculate about what the government may be after.

But in a statement released by the Washington-based group, NAR said the probe relates “to association policies and rules governing the display by real estate brokers of residential listings data on or through the Internet.”

Investigators want information on NAR policies governing Internet Data Exchange (IDX) and Virtual Office Websites (VOW), the association said.

“NAR’s VOW policy allows brokers who participate in the nation’s approximately 900 multiple listing services to display MLS property listing data when providing online brokerage services to consumers via Internet Web sites, also known as virtual office Web sites,” the NAR said. “The policy also protects the integrity and security of that data, respects sellers’ rights to privacy and maintains the viability of the MLS system.

“The NAR Board of Directors approved the policy, which is the result of over a year of research and careful deliberation by two NAR work groups, at the association’s midyear meetings in May,” the association said.

In August, the association published an article by its general counsel, Laurie Janik, alerting members to be aware of what appears to be a fine line between VOWs and antitrust violations.

The article was published in the association’s REALTOR magazine and is currently posted on the NAR Web site, http://www.realtor.org.

“The policy’s opt-out provision, which gives brokers the choice not to have their listings displayed on other brokers’ VOWs, could create potential for violating antitrust laws if it’s not implemented properly,” Janik wrote.

“Antitrust statutes prohibit agreements between competitors that unreasonably restrain trade,” she said. “To avoid antitrust violations, brokers should exercise care in complying with VOW opt-out policies.

“Regardless of whether a broker chooses to opt out … it’s absolutely essential that the decision be made independently, rather than in concert with other real estate companies,” Janik said. “Any such discussions could raise a very real concern that brokers might be accused of participating in an agreement, or conspiracy, in restraint of trade.”

Patrick Crowley is a political reporter and columnist and former business writer for The Cincinnati Enquirer. Email Patrick at: pcrowley@enquirer.com