An antitrust lawsuit against the National Association of REALTORS® (NAR) had been seemingly settled. Now, the Department of Justice (DOJ) has withdrawn their agreement.
A spokesperson from NAR called the withdrawal a “complete, unprecedented breach of agreement by the Department of Justice,” adding that the settlement had been negotiated and approved by the head of the Antitrust Division.
According to NAR, the association had already begun to implement the agreed-upon changes, which would repeal and modify certain anticompetitive rules, such as:
– Prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn
– Allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free
– Enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered
– Limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for an NAR-affiliated MLS.
“NAR has fulfilled all of our obligations under the settlement agreement and now the DOJ is inexplicably backing out,” said NAR. “If the department does not live up to its commitments under the terms of the agreement, we are confident in our pro-consumer and pro-competition policies.”
The DOJ said it withdrew from the settlement so it could perform a broader investigation into NAR’s rules.
“The proposed settlement will not sufficiently protect the Antitrust Division’s ability to pursue future claims against NAR,” said Acting Assistant Attorney General Richard Powers of the DOJ’s Antitrust Division in a statement. “Real estate is central to the American economy and consumers pay billions of dollars in real estate commissions every year. We cannot be bound by a settlement that prevents our ability to protect competition in a market that profoundly affects Americans’ financial well-being.”
Over the past several years, Texas-based Real Estate Exchange (REX) has jumped on these anticompetitive allegations, pursuing lawsuits against the association, going as far as commissioning a study highlighting the “anti-competitiveness of the current industry structure.”
This past June, however, a U.S. district court judge ruled against the start-up, stating that REX “has not supported its claim that there is any deception that is injuring a substantial portion of the purchasing public.”
These are not the first anticompetition cases filed against NAR. In 2005, the DOJ filed a lawsuit against the organization, alleging that NAR rules limit competition from real estate brokers who use the internet to serve their customers. The lawsuit targeted policies that allegedly blocked internet-based companies from accessing MLS data.
The DOJ and NAR reached an agreement in 2008. The settlement terms required NAR to repeal its anticompetitive policies and MLSs to repeal rules based on these policies.
While these past lawsuits have been resolved, commission-based antitrust allegations continue to haunt the association.
NAR’s statement continued:
“The National Association of REALTORS®’ rules and policies have long sought to ensure fair and competitive real estate markets for homebuyers and sellers. Grounded in our commitment to act in the best interests of buyers and sellers, we regularly update our rules and policies to protect consumers and provide transparency.”
According to the DOJ, the department pursued NAR’s agreement to modify the settlement to “adequately protect and preserve the department’s rights to investigate and challenge additional conduct by NAR.” However, the DOJ and NAR could not reach an agreement.
This is a developing story. Stay tuned to RISMedia for updates.
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to email@example.com.