DOJ v. Realtors: Back in the Ring

This article is part of a Chronicle. See more from this Chronicle

J. Bruce McDonald, Jul 10, 2008

The question is not “will” but “when” will antitrust enforcers challenge any new real estate broker association rules prescribing how the brokers compete. The U.S. Department of Justice antitrust lawsuit against the Consolidated Multiple Listing Service is just the latest in the long-running battle between the real estate broker industry and the DOJ and U.S. Federal Trade Commission over what if any limitations the industry can impose on competition by new business models made possible by the Internet.

The development of Multiple Listing Services (“MLS”) may have been the most significant development in the residential real estate market in the twentieth century. A joint venture among brokers, an MLS allows brokers to communicate to other brokers their listing information on homes their clients want to sell, obtain information on homes their clients may want to buy, and cooperate in other ways, including making arrangements to share commissions. By providing a mechanism to pool their listings on all or nearly all homes in a locality, an MLS increases the quality and lowers the cost of the services brokers provide to buyers and sellers of houses. These joint ventures are largely procompetitive and so valuable that participation in the local MLS is necessary for a broker to compete in almost any local market.

As it has for so many other industries, the Internet has revolution…

ACCESS TO THIS ARTICLE IS RESTRICTED TO SUBSCRIBERS

Please sign in or join us
to access premium content!