Ftc Loses A Round In Mls Witch Hunt

Friday, December 14, 2007

A Detroit-area MLS's decision to stand and fight the FTC has paid off big time.

The Federal Trade Commission filed a complaint last year against RealComp II, Ltd, claiming the broker-owned MLS promoted anti-competitive policies with regard to the posting of MLS listings to the public.

Seems RealComp only wanted to publish listings provided by brokers that employ other brokers, not listings in which the seller would represent himself or refuse to pay cooperating brokers.

This little trick is designed to get buyers to contact the seller directly, and skip paying their broker. Realcomp didn't prevent these MLS-only brokers from joining the MLS, only from putting their listings on MLS public marketplace feeds like Realtor.com.

Since the MLS was designed to facilitate cooperation between brokers on both sides of the transaction, it's understandable that some brokers wouldn't like MLS-only brokers sneaking FSBOs into their public listings feeds.

Chief Administrative Judge (ALJ) Stephen J. McGuire dismissed the FTC's complaint on the basis that the FTC didn't prove its case.

While he agreed that "Complaint Counsel 'has made a prima facie showing as to the anticompetitive nature of the alleged restraints,' the ALJ ruled that with "respect to Realcomp's Search Function Policy," the "Complaint Counsel had not shown that the nature of the alleged restraint was anticompetitive or unduly hindered consumer choice." In other words, no competitors were hurt and no consumers were hurt. Next case.

But before anyone breaks out the champagne, here's a little footnote. When McGuire has ruled against the FTC before, he's been overturned. Why? The next step is an appeal.

The FTC can actually review its own case and make its own ruling.

Is this a great country or what? But the David-Goliath battle isn't over yet. The FTC also filed against other MLSs and associations. Five have "settled" with the FTC, but any MLSs remaining should stand and fight.

Hear that, NAR? To see the ruling, go to ftc.gov.

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