Thursday, December 13, 2007

Realcomp wins Round 1 with the FTC

Here's an excerpt from today's press release from the Federal Trade Commission:
In an initial decision filed on December 10, 2007 and announced today, Chief Administrative Law Judge (ALJ) Stephen J. McGuire dismissed a Federal Trade Commission complaint issued last year against a realtors’ group in southeast Michigan, ruling that “upon review of the totality of the evidence . . . it is determined that Complaint Counsel has not met its burden” of demonstrating that the policies of Realcomp II, Ltd. (Realcomp) have unreasonably restrained or substantially lessened competition in the relevant market. McGuire accordingly concluded that Complaint Counsel had not shown that the group’s policies resulted in “actionable consumer harm” in violation of Section 5 of the FTC Act.
Here's a link to ALJ McGuire's initial decision (be patient, it's a 144 page, 11mb file).

I have looked over the decision, and note the following-
  • While the “dual-listing” option noted in the Initial Decision may get an Exclusive Agency listing on, it will not get such a listing on or Realcomp’s IDX feed, both popular methods for Michigan consumers to view listings. And as for that listing, it will be inferior to the same listing that would show up on if it was submitted directly by Realcomp. This is because different MLSs use different data fields, and certain local data (i.e., the names of appropriate schools) will not appear on such dual-listings. Perhaps most importantly, the dual-listing option is dependent upon the “bypass” MLS maintaining its current upload policies. Such policies are likely to change should this Initial Decision stand.
  • I have a hard time accepting the procompetitive justifications offered by Realcomp for its Website Policy, in light of the National Association of Realtors’ prior statement that Exclusive Agency listings on IDX feeds “would not detract from the purposes of the MLS.”
  • To sum it up, this ruling essentially concludes that Realcomp’s Website Policy reasonably restrains the public exposure of non-Exclusive Right to Sell listings. I don’t think there is very much reasonable about it.

Wednesday, December 12, 2007

Another MLS settles with the FTC over alleged anticompetitive practices

From the Federal Trade Commission's press release of earlier today:
The Federal Trade Commission today charged Multiple Listing Service, Inc. (MLS), a group of real estate professionals based in Milwaukee, Wisconsin, with violating the antitrust laws by adopting rules that withheld valuable benefits of the multiple listing service it controls from consumers who chose to enter into non-traditional listing contracts with real estate brokers. The rules blocked non-traditional, less-than-full-service listings from being transmitted by MLS to popular Internet web sites, but provided this important benefit for traditional forms of listings.

In settling the charges, MLS is barred from adopting or enforcing any rule that treats one type of real estate listing agreement more advantageously than any other, and from interfering with the ability of its members to enter into any kind of lawful listing agreement with home sellers. The order applies not only to MLS, but to other entities it controls, including MetroMLS and any affiliated Web site it operates. The settlement announced today follows the FTC’s 2006 announcement of a sweep alleging similar conduct by multiple listing services in other local areas in several states.

“The Commission action announced today reconfirms our commitment to ensuring that consumers can freely enter into lawful agreements with real estate brokers for help in selling their homes,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “Homeowners should be able to lawfully contract with a broker on the terms that they choose, without facing interference by the broker’s competitors.”

For those of you interested, here are links to the FTC's complaint, order and analysis.

Tuesday, December 4, 2007

Judgment entered against Idaho class on tying claims

It's been over six months since anything material has come out of the four class actions pending in federal district court in Idaho. You'll recall the court previously certified the following class in these cases, which allege that each defendant illegally tied the purchase of undeveloped land to payment of a commission based upon the value of the land plus anticipated development thereon:

All persons who: (1) bought an undeveloped lot in a subdivision in either Ada, Boise, Canyon, Gem or Owyhee county, Idaho between August 18, 2001 and February 28, 2006 in which Defendant has or had the exclusive right to market or sell the subdivision lots on behalf of the developer; (2) were required to build a house on the lot in order to buy the lot; and (3) were required to pay Defendant a commission based on the cost of the lot plus the actual or estimated cost of the house in order to buy the lot.
The wait is over. Last Friday District Judge Winmill granted summary judgment in favor of the four defendants on the state and federal tying claims. After identifying the relevant legal issue as "whether Defendants, in allegedly forcing Plaintiffs to buy Defendants' services on the sale of the subject homes built on the lots, foreclosed other brokerages from selling the same product to Plaintiffs," the court concluded that the defendants demonstrated that plaintiffs “lack evidence of foreclosure by pointing out that Plaintiffs did not want to purchase the tied product from any source.”

The plaintiffs' Idaho Consumer Protection Act claims remain before the court at this time.