Attorneys for the Department of Justice (DOJ) Antitrust Division yesterday submitted their latest response to a proposed settlement in the long-running MLS PIN commission lawsuit, reiterating that law enforcement will continue to oppose a system where sellers “delegate initial price setting” for buyer agents.
In a supplemental brief filed in the Federal District to Massachusetts ahead of a hearing to preliminarily approve the deal—which was initially agreed to by the MLS and plaintiffs in 2023, but was delayed by the DOJ’s intervention—DOJ lawyers called recent changes made to the agreement “superficial.”
“(T)he fundamental problem with the current rule is not an absence of information, but rather that it pressures sellers into making offers. Additional process around offers of compensation neither diminishes the threat of steering nor addresses MLS PIN’s role in perpetuating this system,” the DOJ wrote.
MLS PIN’s proposed settlement would notably still allow offers of commission on the MLS, unlike the National Association of REALTORS’® (NAR) deal. DOJ lawyers did not address the NAR deal specifically in this latest filing, although plaintiffs in the MLS PIN case previously said the DOJ rebuffed questions about whether it would be more amendable to changes that “mirrored” the NAR deal.
“Brokerage fees represent a substantial portion of the costs of making those transactions—costs that should be kept in check by unrestrained competition among brokers,” the DOJ wrote. “Yet, despite technological advances and shifts over time in how Americans buy and sell properties, real-estate broker commission rates in the United States and Massachusetts have barely budged from the 5-6% ‘standard’ rates for decades.”
Almost exactly a year after NAR announced a settlement in the class-action commission lawsuits (separate from the deal struck by MLS PIN, which is not affiliated with NAR), the industry continues to grapple with legal challenges to how commissions are advertised and paid. While courts have largely affirmed the fairness of settlement deals, the DOJ’s interest has loomed large as it has characterized practice changes as not doing enough to address alleged antitrust violations.
For the most part, the DOJ’s latest filing focuses on alleged “steering,” where buyer agents discourage clients from viewing properties with less-than-average offers of compensation. NAR has claimed that this is impossible based on its new rules, although the DOJ has previously said it does not want to see offers of compensation made “anywhere.”
“(T)he proposed injunctive relief will simply maintain the status quo, allowing MLS PIN and its participants to continue to insulate brokerage fees from competition and restrain buyers’ and sellers’ ability to obtain competitive rates via individualized negotiations with their brokers,” the DOJ wrote.
A handful of other NAR-independent MLSs have chosen to keep offers of compensation on their platforms, though, so far, the DOJ has seemingly chosen not to directly target these entities.
Whether there has been any change in the DOJ’s view of NAR’s deal is unclear. Notably, the filing is signed by a different lawyer—trial attorney Katherine E. Clemons—than the last hearing in which the DOJ participated back in late January.
The DOJ filing also objects to the payment proposed by MLS PIN and the plaintiffs, which was raised from $3 million to $3.9 million after the DOJ’s objection. Judge Patti Saris, who is overseeing the case, promised to compare the payment to NAR’s deal at the approval hearing, which is currently scheduled for April 4.
