Thursday, May 17, 2007

Private antitrust action filed against RealComp II, Ltd. and MiRealSource

On Monday a federal antitrust lawsuit was filed by Home Quarters Real Estate Group, LLC against RealComp II, Ltd. and MiRealSource in Michigan federal court. As you know, the FTC recently settled antitrust charges against MiRealSource, and is presently litigating against RealComp, in connection with allegations that the associations refused to forward certain MLS listings to public websites such as

Plaintiff's suit explains that it is seeking damages as a result of the defendants' "prior unlawful actions and efforts to prevent [plaintiff] from providing to the public an efficient and cost-effective way to buy and sell real estate in the Detroit metropolitan area. [Plaintiff] previously operated as a licensed real estate brokerage engaged in the practice of assisting consumers with the purchase and/or sale of residential properties. [Plaintiff] provided services as an innovative realty company that developed faster and more efficient ways to provide realty services to prospective homebuyers and sellers utilizing modern internet technology. [Plaintiff] provided its customers with the same realty services and same information provided by other realtors in the State of Michigan. However, [plaintiff] did so using a different and more efficient way of doing business that passed the resulting cost savings on to its customers."

As to the defendants, whose respective memberships allegedly "overlap in substantial part," "[p]articipation in each of these MLSs, and access to MLS data provided by them, has been crucial at all relevant times for any realtor, including [plaintiff] to be able to effectively compete in the Southeastern Michigan residential real estate market (Wayne, Oakland, Macomb, Washtenaw, and Livingston Counties)."

The complaint includes individual counts against each defendant alleging violations of Section 1 of the Sherman Act, violations of the Michigan Antitrust Reform Act, and tortious interference with plaintiff's contractual relationships. Plaintiff claims that the "[d]efendants previously terminated and/or threatened to terminate [plaintiff's] right to access their MLS data as part of their efforts to destroy HQ's innovative business model and to thwart competition. Moreover, in furtherance of Defendant's boycotts denying [plaintiff] essential MLS data for conducting searches for listed properties, MiRealSource refused to permit any of [plaintiff's] listings to be posted on its MLS, and Realcomp threatened to terminate [plaintiff's] access to its MLS. These actions, among others, resulted in the cessation of [plaintiff's] business and thereby caused substantial damages to [plaintiff], including but not limited to lost market share, lost revenues and lost profits." Plaintiff asks for actual damages in excess of $10 million against each defendant, and that such amounts be trebled pursuant to federal and state law.

The complaint plus two exhibits (consisting of the defendants' rulebooks) is in excess of fifty pages, and was filed in two parts (Part One and Part Two).

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