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Thursday, November 19, 2020

Department of Justice Sues, then Settles, with NAR Concerning Anticompetitive MLS Practices

Today, the Department of Justice Antitrust Division announced the simultaneous commencement and settlement of antitrust and anticompetitive practice complaints against the National Association of Realtors. 

In its press release, found HERE, the DOJ identified four areas of anticompetitive practice which they allege "result[ed] in decreased competition among real estate brokers":

  1. Prohibiting local MLSs from disclosing to prospective buyers the amount of the commission earned by buyer brokers;
  2. Permitting buyer brokers to misrepresent to buyers that their buyer brokerage services are free;
  3. Enabling buyer brokers to filter MLS listings by the amount of buyer broker commission offered; and
  4. Preventing non-NAR brokers from accessing key lockboxes for homes listed on MLS.

The settlement will directly address these four issues in order to "enhance competition in the real estate market, resulting in more choice and better service for consumers." The proposed settlement can be found HERE and will be open for public comment once posted to the federal register. 

NAR has routinely found itself under antitrust scrutiny due to its overwhelmingly popular MLS platforms, which often are the only multiple listing platforms available in local markets. Three recent federal lawsuits filed against NAR have focused on NAR's policies regarding compensation for buyer brokers, alleging that buyer brokers are unable to compete on price due to the requirement that all listings on MLS offer some form of cooperating brokerage commission. It is alleged that these anticompetitive practices have driven up the overall cost of brokerage services for consumers by eliminating competition on the buyer broker side of the market. 

The announcement by the Department of Justice was silent with regard to whether any additional investigations into NAR were ongoing. 

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