A Win for Consumers and REALTORS®

NAR and the Department of Justice reach an agreement on MLS policy.

July 1, 2008

By now, I’m sure you’ve heard about the proposed settlement in the case of the United States of America v. NATIONAL ASSOCIATION OF REALTORS®. Whether you followed the details of the lawsuit or not, you ought to understand the positive outcome we achieved.

Five years ago, a group of REALTOR® volunteers worked hard to set meaningful rules for data sharing on the Internet. The so-called virtual office Web site, or VOW, rules gave brokers control over whether their listings would appear on the “virtual brokerage” Web sites of other MLS participants. Practically speaking, we knew that very few brokers would choose to opt out of having their listings appear on other brokers’ sites. But we wanted to ensure that listing brokers had a means to protect the interests of sellers should their listings show up in an online environment the sellers found objectionable.

Around the same time, we modified our model MLS rules to say that REALTOR® MLSs could require their participants to be bona fide brokers. We were concerned about third-party companies obtaining brokers’ licenses and joining the MLS without any intention of engaging in real estate brokerage. They’d use our listings to attract buyers to their Web sites — and sell those buyers back to us in the form of “qualified leads.”

Those scenarios were far from science fiction. But our determination to give brokers some control in the Wild West of the Internet led to a two-year investigation by the Justice Department. We took the department’s concerns seriously — advising MLSs to delay implementing of the VOW and MLS membership rules. But we pledged to go to court if needed to prevent “anything-goes” use of our listing data.

In 2005, the Department of Justice sued NAR, charging that our rules violated antitrust law. Through more than two  and a half years of evidence gathering, document production, and depositions — and no small amount of media scrutiny — NAR stood up for our rights as brokers.

The proposed settlement resolves Department of Justice concerns, ensuring a level playing field for brokers operating a VOW, while affirming the important principles that NAR stood up for when it set the VOW rules five years ago.

First, the settlement affirms the rights of consumers. A newly revised VOW policy will require VOW operators to have a way for consumers to contact them to answer questions about the listings displayed on the VOW. Also, sellers can opt out of having their listings displayed online. If sellers choose to be online, they can ask that blogging, automated valuations, and false information about their property on an MLS participant’s VOW be removed.

Second, the settlement affirms the value of MLSs as a tool of broker-to-broker cooperation. MLSs retain the right to require that participants be actively engaged in real estate brokerage, actually helping people buy or sell homes. Our clients retain control, and our MLSs are strengthened. What an incredible outcome for our industry!

Read the details of the final order and the revised VOW policy at REALTOR.org/doj.

Richard F. Gaylord

Richard F. Gaylord was 2008 president of the NATIONAL ASSOCIATION OF REALTORS®.