The Department of Justice said May 27 it has reached a settlement in its long-running legal dispute with the National Association of Realtors. Under the terms of the settlement, the Realtors will enact a new policy that guarantees Internet-based brokerage companies will not be treated differently than traditional brokers.
Under the new policy, Realtor-affiliated brokers participating in multiple-listing services will be prohibited from withholding their listings from brokers who use virtual office Web sites, generally known as VOWs. The Realtors agreed to a 10-year settlement to ensure the group continues to abide by the requirements of the settlement.
"Today's settlement prevents traditional brokers from deliberately impeding competition," Deborah A. Garza, deputy assistant attorney general of the DOJ's Antitrust Division, said in a statement. "When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates."
The Realtors also agreed to adopt antitrust compliance training programs that will instruct local associations about the antitrust laws generally and about the requirements of the proposed settlement. The National Association of Realtors is a trade association of more than 1.2 million residential real estate members who operate in local real estate markets nationwide.
As virtual real offices began to emerge in the late 1990s, the Realtors moved quickly against them, passing rules that allowed traditional brokers to withhold their listings from VOWs while continuing to prohibit members from withholding listings from traditional multiple-listing services. The Realtors also passed a rule preventing member brokers from educating customers about homes for sale through VOWs.
In September 2005, the government filed a civil antitrust lawsuit against the Realtors, challenging the group's policies and related rules that obstructed real estate brokers who use Internet-based tools to offer better services and lower costs to consumers. The DOJ said that the policies prevented consumers from receiving the full benefits of competition, discouraged discounting and threatened to lock in outmoded business models.