An administrative law judge in Washington dismissed a complaint by the Federal Trade Commission staff alleging that an organization owned by Realtors in the Detroit area unlawfully discriminated against discount real-estate brokers. The decision, announced by the FTC yesterday, is likely to embolden the National Association of Realtors to resist pressure on competition issues from federal regulators. The NAR is the biggest trade group representing real-estate brokers and agents.
The case was filed in October 2006 against Realcomp II Ltd., Farmington Hills, Mich., which operates a multiple-listing service, or MLS, covering southeastern Michigan. An MLS, typically owned by brokers or local Realtor organizations, maintains a database on homes available for sale and enforces rules for its users. The FTC challenged Realcomp rules that block certain types of listings of homes for sale from being displayed on Realtor.com and some other sites often used by consumers to search. The listings affected, known as "exclusive agency" listings, often are used by discount brokers charging flat fees rather than a percentage of the sales price.
Realcomp argued that it has the right to favor listings designed to promote transactions that generate commissions for real-estate brokers, who indirectly own Realcomp through their membership in local Realtor groups.
The judge, Stephen J. McGuire, ruled that the FTC's lawyers hadn't proved that the Realcomp policies "unreasonably restrained or substantially lessened" competition. The FTC staff will appeal the decision.
Source: WSJ.com