From time to time our MLS is asked why brokerage business practices that are different are even permitted to enter their listing into our MLS. For more than a century, federal antitrust laws have existed as a way to promote competition and prevent monopolies in business. Because MLS is akin to a Grand Central Station is the real estate market place, the MLS is under close scrutiny by the U.S. Department of Justice for practices that would prohibit competition. And, because real estate brokers and salespeople frequently cooperate with one another in the sale of properties, brokers, agents, real estate associations and the MLS have numerous opportunities to engage in conduct that might be construed as violations of antitrust laws.
Rules Affecting MLS - MLS Antitrust Compliance Policy
The purpose of multiple listing service is the orderly correlation and dissemination of listing information to participants so they may better serve the buying and selling public. Boards and associations of REALTORS® and their multiple listing services shall not enact or enforce any rule which restricts, limits, or interferes with participants in their relations with each other, in their broker/client relationships, or in the conduct of their business in the following areas.
- Boards and associations of REALTORS® and their MLSs shall not:
Fix, control, recommend, or suggest the commissions or fees charged for real estate brokerage services (Interpretation 14).
- Fix, control, recommend, or suggest the cooperative compensation offered by listing brokers to potential cooperating brokers.
- Base dues, fees, or charges on commissions, listed prices, or sales prices. Initial participation fees and charges should directly relate to the costs incurred in bringing services to new participants.
- Modify, or attempt to modify, the terms of any listing agreement; this does not prohibit administrative corrections of property information necessary to ensure accuracy or consistency in MLS compilations.
- Refuse to include any listing in an MLS compilation solely on the basis of the listed price.
- Prohibit or discourage participants from taking exclusive agency listings or refusing to include any listing in an MLS compilation solely on the basis that the property is listed on an exclusive agency basis.
- Prohibit or discourage participants from taking “office exclusive” listings; certification may be required from the seller or listing broker that the listing is being withheld from the MLS at the direction of the seller.
- Give participants or subscribers blanket authority to deal with or negotiate with buyers or sellers exclusively represented by other participants (Interpretation 10).
- Establish, or permit establishment of, any representational or contractual relationship between an MLS and sellers, buyers, landlords, or tenants.
- Prohibit or discourage cooperation between participants and brokers that do not participate in the MLS.
- Prohibit or discourage participants or subscribers from participating in political activities (Interpretation 15).
- Interfere in or restrict participants in their relationships with their affiliated licensees (Interpretations 16 and 17).
As used in this policy, “rule” includes all rules, regulations, bylaws, policies, procedures, practices, guidelines, or other governance provisions, whether mandatory or not. “Multiple listing service” and “MLS” means multiple listing service committees of boards and associations of REALTORS® and separately-incorporated multiple listing services owned by one or more boards or associations of REALTORS®.
These policy prohibitions are subject to and limited by applicable statutes, ordinances, and governmental regulations, to agreements entered into by an MLS or board or association of REALTORS® and an agency of government, and to final decrees of courts or administrative agencies.
This policy does not prohibit boards or associations of REALTORS® or their MLSs from adopting rules or policies establishing the legitimate uses of MLS information, from prohibiting unauthorized uses of MLS information, or from establishing rules or policies necessary to prevent illegal collective action, including price-fixing and boycotts.
It is the duty and responsibility of all boards and associations of REALTORS® and MLSs owned by or controlled by boards or associations of REALTOS® to ensure that all bylaws, rules, regulations, and other governance provisions comply with all mandatory multiple listing policies of the National Association of REALTORS®. Boards and associations of REALTORS® failing to conform with these policies will be required to show cause why their charters should not be revoked.
What About Brokers and Agent and Antitrust?
Do you know the ins and outs of antitrust? Each of the following questions is True or False.
- Two competitors in my market asked me to cooperate with them in setting a “standard” commission for the area. I refused, but subsequently started charging the same rate that my competitors suggested. Because I didn't overtly agree to participate in price fixing, I am not part of a conspiracy.
- Even though my salespeople are independent contractors, I may establish the commission rate for my company and require salespeople to charge that rate.
- Brokers who agree not to cooperate with another company, such as by not showing that company's listings, do not violate antitrust laws if they enter into that agreement because they consider the company's aggressive "high-tech" marketing techniques to be unethical.
- The best way to persuade sellers that they should enter into an exclusive-right-to-sell agreement with you is to tell them that MLS members have an "informal understanding" to show buyers exclusive-right-to-sell listings first.
- My company benefits from MLS participation, but we don't want to pay a cooperative commission split to real estate companies that offer only nominal compensation on their listings, which we think they include simply so that their listings are shown on REALTOR.com and other public real estate Web sites. But if we decide to offer them the same amount of compensation that they offer us, we'll be breaking the law.
- Antitrust price-fixing rules do not allow a real estate company to engage in a public advertising campaign that highlights the commission rate it charges to consumers.
- Classified and display advertising rates in a local newspaper have increased substantially, which hurts all the real estate companies in town. Yet, no company is willing to stop advertising for fear of losing clients and customers to their competitors who continue to advertise at the high rates. To pressure the newspaper to reduce rates, which would benefit the companies and consumers, the real estate companies may agree that they will stop advertising unless and until the paper complies.
- If one of my salespeople participates in a price-fixing discussion, my company can be held liable — even if I have no personal knowledge of the salesperson's conduct.
How do you think you did? Check your answers at realtor.org