The Government's Concerns/Objectives in U.S.A. v. NAR

Front and center in the United States’ federal antitrust action against the National Association of Realtors (“NAR”) are NAR's Internet Listing Display (“ILD”) Policy and a revised NAR MLS membership policy (together referred to as the Modified VOW Policy in the government's Amended Complaint). The government is also challenging NAR’s initial VOW Policy, which was rescinded on August 31, 2005, but had been adopted by approximately 200 NAR-affiliated MLSs across the country at the time the lawsuit was filed here in Chicago.

Here are the government’s main concerns relating to the ILD Policy and the revised membership policy, as set forth in its Amended Complaint (with some minor modifications by me):

1. A blanket opt-out provision allows brokers to direct that their clients' listings not be displayed on any competitor's Internet site. When exercised, this provision prevents a broker from providing over the Internet the same MLS information that brick-and-mortar brokers can provide in their offices. Also, NAR's ILD specifically exempts its own "Official Site," Realtor.com, from the blanket opt out that applies to all Internet sites operated by brokers.

2. MLS membership and access to listings is denied to brokers operating referral services. This policy effectively forbids Internet-based brokers from referring their customers to other brokers for a fee.

3. MLSs are permitted to downgrade the quality of the data feed they provide brokers, effectively restraining brokers from providing innovative, Internet-based features to enhance the service they offer their customers.

4. MLSs are permitted to interfere with efficient "cobranding" relationships between brokers and entities that refer potential customers to the broker.

In its Amended Complaint, the government seeks, among other relief, the following (presumably to address allegedly anticompetitive elements of the ILD Policy and the revised MLS membership policy, as well as the initial VOW Policy):

• Restrain NAR from requiring or permitting its member boards or the MLSs with which they are affiliated to adopt rules implementing the opt-out provisions.
  
• Restrain NAR from requiring or permitting its member boards or the MLSs with which they are affiliated to adopt rules implementing the anti-referral provision contained in the initial VOW Policy or an MLS membership restriction that denies MLS access to operators of Internet-based referral services.
• Restrain NAR from requiring or permitting its member boards or the MLSs with which they are affiliated to adopt rules that restrict — or condition MLS access or MLS participation rights on — the method by which a broker interacts with his or her customers, competitor brokers, or other persons or entities.
  

As you probably know, last year the Court denied NAR’s motion to dismiss the Amended Complaint, and the parties are continuing with fact and expert discovery.