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Friday, September 09, 2005
Law - Justice Department says realtors did not go far enough
Yesterday the ILB quoted from a Washington Post story headlined "Realtors Back Away From Plan To Restrict Access to Listings." Today the Post reports:
The Justice Department's antitrust division yesterday sued the National Association of Realtors, alleging that the powerful trade group is using its online multiple listing service policies to restrict competition from discount brokers offering lower prices."The purchase of a home is one of the most significant financial decisions a family can make, and NAR's policy stifles competition to advantage some of its members at the expense of home buyers and sellers across the country," said J. Bruce McDonald, deputy assistant attorney general in the antitrust division.
Discount brokerages are undercutting the traditional 6 percent commission rate that has continued to dominate even as home prices in some markets, including the Washington area, have doubled over the last five years.
The Realtors group announced yesterday that it was changing its online sales listing policy to make listings more widely available, but Justice Department officials said the changes do not go far enough. * * *
In the lawsuit, filed in the U.S. District Court in Chicago, where the Realtors have their headquarters, the government alleged that the association -- particularly its traditional broker members -- has sought to maintain a "policy that restrains competition from brokers who use the Internet to more efficiently and cost effectively serve home sellers and buyers."
According to the federal filing, when real estate industry leaders developed their policy in 2003, they talked about ways to maintain the status quo. The working group that formulated the listings policy understood that the right to opt-out would limit competition, according to the lawsuit, which alleged that two members of the group said the opt-out right would be "abused beyond belief" as traditional brokers withheld listings from competitors. * * *
"It's great," said Peter Sealey, a professor of marketing at the University of California at Berkeley who has followed the issue. The policies "are a clear conspiracy and restraint of trade. This is long-overdue law enforcement."
Posted by Marcia Oddi on September 9, 2005 07:55 AM
Posted to General Law Related