NAR, the DOJ and Procompetition

Written by Posted On Friday, 13 April 2018 09:35

It’s deja-vu all over again. The 10-year- old settlement and consent decree between the National Association of Realtors® and the U.S. Department of Justice (DOJ) mandating how listings are displayed by online brokerages expires on November 18, 2018. Until then, NAR plans to renew the fight it previously lost to limit the exploitative use of MLS data by third-party data aggregators.

On June 5, 2018, NAR can make its case that “the breadth and depth of competition in the real estate and brokerage industry” at a public workshop held by the DOJ and Federal Trade Commission. Part of the strategy is to share a report by independent economist Frederk Flyer, PhD, titled Procompetitive Benefits of Policies Limiting Access to Multiple Listing Service Data.

Flyer asserts that much of the criticism of limiting information access is concern that consumers of third-party data aggregators of real estate listings, such as Zillow and Trulia, will not have access to full MLS information.

However, what the DOJ and FTC fail to recognize, is that these websites compete in a different antitrust market, argues Flyer, as neither Zillow nor Trulia broker real estate transactions as licensed real estate practitioners do. In fact, part of their business models is to provide lead generation services to the brokers using the brokers’ and their competitors’ data.

“Real estate websites such as Zillow and Trulia are in the business of vying for Internet “eyeballs” and are not in the business of providing brokerage services; hence limiting these sites’ access to proprietary MLS data does not harm consumers of brokerage services nor does it limit their access to information,” writes Flyer.

“These sites are not even essential to consumers who use actual brokerage services, since these data aggregation sites do not provide consumers of brokerage services with any greater access to information.

And that could be the key sticking point – greater access to information. Is a Zestimate greater information? Is access to advertisers greater information? Is allowing brokers to advertise their services on top of their competitors’ listings greater information?

As we discussed ad nauseum in the 2000s, the DOJ and Federal Trade Commission believe that associations restricting MLS data to third-parties limits competition, giving NAR and its subsidiaries a monopoly that harms consumers. NAR’s opposing view is that the forced sharing of MLS listing data with third-party websites benefits the websites, not consumers.

The establishment of the MLS, in which brokers share their listings with other brokers, in itself fosters competition among those members who pay for the service, requiring no obligation to allow third-parties to benefit financially from the collective listing data. It also keeps brokers from showing only their own listings as consumers can see that there are other homes available for sale or rent on association websites and consumer-facing access to the local MLS.

Nar General Counsel Katie Johnson explains that innovation isn’t spurred by providing unrestricted real estate data to technology companies.

States Johnson, “I can confirm that NAR has no plans to alter MLS policies mandating how property listings are displayed by online brokerages when the 2008 settlement agreement expires November 18, 2018.”

This should be interesting. Realty Times is open to new arguments from either side. So let’s throw it out there – brokers, has sharing your listings via your MLS with third-party sites helped or hurt your business?

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Blanche Evans

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