Without these 2 policy changes, more antitrust suits are inevitable

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The real estate industry is no stranger to legal battles, and if we don’t adapt, the next major lawsuits could very well reshape the profession in unexpected ways. In recent years, the legal scrutiny over antitrust practices has heightened, with a particular focus on policies that may stifle competition and hinder consumer choice. 

Two specific practices in the Realtor profession that are likely to come under fire are the National Association of Realtors’ (NAR) Clear Cooperation Policy and some multiple listing services’ (MLSs’) requirement for NAR membership to gain access to the MLS. Both practices raise significant antitrust concerns that could lead to major industry litigation if left unaddressed.

The Clear Cooperation Policy: A barrier to competition

Implemented in 2020, NAR’s Clear Cooperation Policy mandates that any listing marketed to the public must also be submitted to the MLS within one business day. The intent behind this policy was to ensure transparency and equal access to information for buyers and sellers. However, critics argue that it stifles competition and consumer choice by restricting how agents and brokers can market properties.

The problem is that while the policy intends to eliminate certain off-market listings, often referred to as “pocket listings,” it doesn’t entirely succeed in doing so. The policy still allows for office exclusives, meaning that some listings can remain private within a brokerage. 

In fact, some studies, such as one by Redfin, suggest that pocket listings may have actually increased since the implementation of the CCP due to this loophole. The policy aims to create a level playing field by ensuring that most listings are available to every agent in the MLS. 

However, while the CCP permits office exclusives, it restricts any public marketing of these listings. This limitation can hurt the seller by reducing the property’s visibility and marketing reach. It also restricts flexibility for sellers who may have valid reasons for wanting a private sale, such as privacy concerns or the desire to test the market in a more controlled environment.

This restriction on how properties can be marketed could easily be seen as an antitrust violation. NAR asked the Supreme Court to weigh in just last week. It imposes a one-size-fits-all rule on the market that limits the ability of agents and brokers to differentiate their services.

The legal argument is that it creates a monopolistic control over real estate listings, preventing innovation and competition in how properties are sold. The Clear Cooperation Policy could be found to unfairly constrain market forces and restrict the ability of independent brokers and agents to compete outside of the MLS system.

NAR membership requirement for MLS access: An antitrust red flag

One of the most controversial aspects of the real estate industry is the requirement by some MLSs that agents join the National Association of Realtors to gain access to the MLS. The MLS is an essential tool in modern real estate transactions. It is the primary platform where listings are shared, making it indispensable for agents to conduct their business. However, the fact that so many agents in markets across the country must join NAR — at a cost — to access this essential service raises serious antitrust concerns.

This practice effectively creates a monopoly for NAR. Agents who do not wish to join NAR, or who may disagree with its policies, are left with no viable alternative if they want to compete in the marketplace. The forced bundling of NAR membership with MLS access for many associations across the nation (not all certainly) limits freedom of choice and increases the financial burden on agents, many of whom are small business owners.

More critically, it stifles competition by preventing non-NAR agents from accessing the most important real estate tool in the industry.

From an antitrust perspective, this membership requirement could be viewed as “tying” or “bundling” two products — NAR membership and MLS access — in a way that is anti-competitive. Courts have long held that tying arrangements, where a buyer is forced to purchase one product in order to obtain another, can violate antitrust laws if they restrict competition. Tying can be illegal under antitrust laws, such as the Sherman Act or the Clayton Act, if it restricts competition or forces people into unwanted associations between products. 

In this case, the MLS is a market-essential product, and forcing agents to join NAR to access it could easily be seen as creating an unfair competitive advantage for NAR over other professional associations or independent real estate professionals.

Moreover, this policy hurts consumers. When agents are burdened with unnecessary costs, those costs are often passed along to buyers and sellers, either through increased commission rates or reduced flexibility in negotiations. 

In an era where technology could allow for a more decentralized and competitive marketplace, the requirement to be a part of NAR to access the MLS seems increasingly outdated and ripe for a legal challenge.

The path forward: Proactive change to avoid legal battles

The real estate industry is at a crossroads. To avoid the next wave of major antitrust lawsuits, the profession must take proactive steps to address these problematic policies. I suggest doing away with the CCP. 

The CCP is only six years old, and we have successfully conducted real estate for decades without it. Michael Ketchmark, the lead counsel for the Sitzer | Burnett case, and others have argued that this policy primarily benefits NAR by propping up unskilled agents and allowing them to be fed listings to make money.

Second, unbundling NAR membership from MLS access would be a significant move toward reducing antitrust concerns. Opening up MLS access to non-NAR members or allowing local associations to operate independently of the three-way-agreement of associations would foster a more competitive marketplace.

For example, the Alabama Association has called on NAR to allow members to choose where they allocate their membership and dues dollars between associations at the local, state and national levels. They are asking for a decision ASAP before the 2025 billing cycle. 

Agents should have the freedom to choose the professional organizations that best represent their interests without being forced into costly memberships just to access essential tools like the MLS.

The Clear Cooperation Policy and the NAR membership requirement for MLS access are two practices that could lead to significant legal challenges if not addressed. In the absence of these changes, the real estate industry is likely to face continued scrutiny and potentially damaging lawsuits. 

Antitrust violations are not just legal issues — they are also a matter of consumer trust. To preserve the integrity of the profession, it’s critical to ensure that our policies promote competition, innovation and choice — not just for agents but also for the buyers and sellers who depend on them.

By making necessary changes now, the real estate profession can avoid costly lawsuits and ensure a more competitive and transparent market for everyone.