The Realtor Association of Greater Fort Lauderdale The Realtor Association of Greater Fort LauderdaleRAGFL is your source for the latest information on the lawsuit between the National Association of REALTORS® and the U.S. Department of Justice relating to Internet Listing Displays (ILD).
Here is what you need to know:
On Sept. 8, 2005, NAR released a new policy governing the display of MLS property listings on the Internet. That same day, the U.S. Department of Justice filed an antitrust lawsuit against NAR, saying both the new Internet Listing Display (ILD) policy and the Virtual Office Web site (VOW) policy it replaced impede competition in the real estate industry.
NAR attorneys had been in negotiations with the Department of Justice (DOJ) on the association's Internet policy for two years prior to the Sept. 8 release. The ILD policy, which replaces both VOW and the association's Internet Data Exchange (IDX) policy with a single set of rules for displaying MLS data online, is responsive to many of the concerns DOJ expressed in those negotiations.
"We listened to what DOJ had to say, and we think we ultimately developed a significantly better policy," says Laurie Janik, NAR general counsel. "We're shocked and disappointed that after all these discussions, they would sue us over issues that are no longer in our policy."
NAR's new ILD policy is fair, pro-consumer, pro-competitive, and accommodates innovation. The policy will bring consumers more points of access to real estate information from multiple listing services. It also treats all MLS members equally, yet respects the rights of property owners and their listing brokers to market a property as they see fit.
(Sept. 8, 2005) The National Association of Realtors® announced today it has adopted a new policy that ensures that all members of Realtor® multiple listing services will receive exactly the same MLS property listings for display on their Web sites as their competitors.
The policy will bring consumers more points of access to real estate information from multiple listing services than they have ever had before, NAR said.
Read the full press release: http://www.realtor.org/PublicAffairsWeb.nsf/Pages/NewMLSPolicy?OpenDocument
To help you understand why NAR implemented its new policy, explain the issues and principles at stake, and clear up some of the inaccuracies being reported by news media, NAR has developed these questions and answers.
A. The ILD policy is designed to establish a single set of rules for the use of MLS listing data on the Internet by MLS participants. The new policy will create more points of access to that information for consumers than ever before, while protecting the rights that brokers have to determine how listings will be used and where they will be displayed.
Like the VOW policy that preceded it, the ILD policy requires MLSs to provide a solution for participants to post MLS listings at their Web site. That way, buyers can search for listings available for public display on the Web site of the broker of their choice. Buyers will be able to view all listings except those of brokers who've determined it's not in their interests to make their listing data available for display by other MLS participants and those of sellers who elect not to have their listing displayed on the Internet.
The policy treats all MLS members equally yet respects the rights of listing brokers to market a property as they and their clients see fit. Brokers invest time, effort, and money to obtain listings from sellers. That earns them the right to determine whether or not to allow their listings to appear on other brokers' Web sites.
A. The new IDL policy omits the "selective" opt-out that was included in the VOW policy. That opt-out allowed brokers to pick and choose which brokers could show their listings on the Internet. Instead, the ILD policy includes only the "blanket," reciprocal opt-out that's been a key part of IDX. Under this opt-out, brokers can elect not to allow their listings on any other broker's site, but if they make that choice they may not host other brokers' listings on their site. In one change from the IDX policy, sellers must be informed of a broker's opt-out decision, and, if the broker agrees, may direct their broker to allow their listing to appear on others' Web sites, notwithstanding the broker's election to opt out.
The ILD policy eliminates two provisions that were in the VOW policy: a "referral" restriction that prohibited use of listings for the sole purpose of identifying interested homebuyers and selling their names to other MLS participants, and a "clean page rule" that prohibited brokers from advertising other services immediately adjacent to the listings of other brokers.
NAR also included in the ILD policy a DOJ suggestion to add a minimum period before brokers may change their decision to opt-out. That period is 90 days.
A. Most brokers will likely want their listings displayed as widely as possible on as many Web sites as possible and thus available to consumers visiting different brokers' Web sites. But there might be brokers who determine that it's not in their best interests or that of their sellers to have their listings appear on the Web sites of other brokers. Also, "advertising" another broker's listings requires, under state laws, the consent of the listing broker. The IDX and now ILD policies create a presumption of consent; brokers can withhold that consent by opting out.
More fundamentally, not having an opt-out option would leave brokers who don't want to see their listings posted on the Web sites of their competitors no choice but to pull out of the MLS, as some brokers have said they would do. That threatens the vitality and procompetitive benefits offered by the MLS.
"MLSs are not public utilities," says 2005 NAR President Al Mansell. "They're private databases created, maintained, and paid for by real estate professionals to help their clients buy and sell property. Anything that strikes at the trust and collaborative spirit of the MLS threatens the sustainability of the system."
A. NAR believes that the opt-out provision does not violate the law. DOJ asserts that any limitation on the opportunity of brokers to display all listings in the MLS on their Web sites has an adverse affect on the brokers operating such sites, and is therefore unlawful. They overlook -- or ignore -- the reality that the broker must exercise the opt-out right individually and unilaterally and that a broker does and should have the right to choose not to assist his competitors by having the obligation to let them display his listings on their sites.
A. No. Complete and unrestricted access to MLS data for all participating brokers, whatever their business model, has always been and continues to be the rule.
But that access to listing data is intended to facilitate the sale of the properties in those listings. Thus, all MLS-participating brokerages that also operate Web sites that display properties have the same access to local MLS data as traditional brokerages.
For this reason, a home buyer working with a licensee who operates a Web site that displays listed properties can learn about and see anything that's available on the MLS, even though he may not be able to view on the Internet the listings of other participants who have opted out.
At the same time, it was never the purpose of the MLS system to give brokers unrestricted access to MLS data for marketing their business.
A. It's impossible to realistically predict the timing of the case, but it is likely to take at least a year to get a ruling, which is typical in antitrust lawsuits. Once a ruling is made, the losing side has the option to appeal, which could push final resolution back another year.
If the end result is negative for NAR, it could require the removal of the opt-out provision or changing it in such a way that the effect would be the same as removal.
As a practical matter, the reach of a negative decision may be limited, since we believe it is likely that few brokers will opt out of the policy.
But as a matter of principle, a loss in the courts would be a tremendous blow to the collaborative character of the MLS. Should brokers -- even if only a small minority -- quit the MLS rather than relinquish their right to keep their listings off of other brokers' sites, the rationale of the MLS would be undermined.
"We can't take for granted the integrity of the MLS system, which since its birth 120 years ago has been based on voluntary participation by real estate professionals," says Mansell.
That's why NAR is prepared to fight in court to preserve brokers' opt-out rights.
"We owe it to our members and their customers to obtain a decision from a court on the legal merits of the case," says Mansell. "Some principles are worth fighting for, and this is one of them."
For more information consult: http://www.realtor.org/ild
