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FTC in MLS Fight
The most recent trend
the Federal Trade Commission (FTC) and
the Department of Justice (DOJ) have
been known for is that their online
operators are alleging that fair trade
laws have been violated. Realty
Times columnist, Blanch Evans delves
into the dispute in her July 20, 2006
article, “FTC, FTC Watchdog Square
Off Over Real Estate Persecution.”
Evans claims that in the last year,
both the FTC and DOJ have “chastised”
and filed numerous lawsuits against
real estate companies. She lists three
recent occurrences.
“1. The DOJ sued the National
Association of Realtors
over its listing display policy. 2.
The FTC sued the Austin Board of Realtors
over a listing agreement requirement.
3. The DOJ and FTC sent threatening
letters to a number of state commissions
that are considering establishing minimum
service levels for brokerage, including
Texas, Oklahoma, and New Mexico.”
Evans mentions these points to demonstrate
how she believes the FTC and DOJ are
treating real estate companies unfair.
Her major involve MLS listings, though.
“MLSs were created as a means
to facilitate cooperation among competing
brokers for consumers' benefit, and
that is being squarely ignored by the
law enforcement agencies to defend business
models who don't enter into cooperation
in the spirit it was intended -- to
directly
sell homes for sellers.”
Evans urges that MLS listings were intended
solely to help brokers sell properties,
not to give marketing advantages to
third parties or to drive down brokerage
prices by encouraging limited service.
“In fact, it looks as if the FTC
and DOJ aren't going to be happy until
every MLS is a public utility, open
to third-party service providers to
use in lead generation/referral fee
business models and consumers who really
don't want to hire an agent, but grudgingly
pay them a pittance in order to have
their homes in the local MLS.”
Patrick Roach, deputy assistant director
for the Bureau of Competition in the
Austin Board of Realtors investigation
says that is not what the FTC wants.
"That's certainly not what this
case is about. The MLS is not a public
utility, open to the world.”
Roach continues to describe how MLS
listings broke a rule in not completely
providing the homebuyer terms and conditions
and compensation. “This Board
had a rule that certain types of contracts
aren't treated like other contracts
that they like better.”
Roach emphasizes how valuable MLS listings
are for brokers, and that they bring
cooperation together for home
buyers and home sellers. However,
he has to govern rules that he believes
the MLS is violating.
“One problem that comes with a
cooperative venture is that care has
to be taken that objectives are furthered
that are pro-competitive. That is the
context of the Commission's concern
about this rule," Roach said
The FTC is still in conflict with MLS
listings, and several real
estate companies. The FTC claims
to have to enforce rules for the sake
of ever party’s well-being.
“Regardless of who's right, the
pursuit of the real
estate industry will continue.”