Department of Justice has withdrawn its recent proposed settlement with National Association of REALTORS®(NAR) on “anti-competitive” practices. Department of Justice now wants broader investigation into possible anti-competitive practices stated in NAR rules
Brief Background on Department of Justice (DOJ) Lawsuit Filed Against National Association of REALTORS® (NAR)
On November 19, 2020, the US Department of Justice (DOJ) filed an antitrust lawsuit against the National Association of REALTORS® (NAR) for what the DOJ claimed were anticompetitive practices. Some of those practices included prohibitions on disclosing information on buyer-broker commissions, limited access to lockboxes so only some agents/brokers could access for-sale homes while others could not, lack of disclosure about MLS/NAR relationships and limited access to property listing information via pocket listings.
This lawsuit complained that NAR’s rules squelched both price competition, fair competition practices and equal-access to information.
On November 20, 2020, some discount brokers cheered the lawsuit on the grounds of greater competition among all agents/brokers and other brokers/agents cheered the lawsuit on the grounds of greater transparency.
A proposed settlement was announced in early 2021. That proposed settlement generated negotiations among NAR and the DOJ to review and resolve their differences in order that fair competition and fair pricing could be achieved.
On March 23, 2021, NAR’s Mantil Williams said “the trade group was still working through the details (of a settlement)” and that the negotiation process among NAR and the DOJ would take months.
On May 11, 2021, NAR’s general counsel said that the negotiations with the DOJ continued to be ongoing.
On June 2, 2021, the DOJ said that a judge had made a mistake when he dismissed an antitrust lawsuit against NAR concerning the banning of pocket listings despite the DOJ prior ending of its investigations into the legality of pocket listings.
On June 15, 2021, The US Federal Trade Commission (FTC) announced Lina Khan (a known advocate for updating antitrust laws) as its new chairperson. Though the FTC is tasked with investigating seemingly unfair/deceptive trade practices, it was not directly involved in the DOJ case against NAR.
On July 1, 2021, the DOJ announced that it was abandoning its settlement with NAR as it wanted to “permit a broader investigation of NAR’s rules and conduct to proceed without restriction.”
Only Thing that Certain Now is Continued Legal Wrangling
Obviously, the DOJ isn’t finished “investigating” and “proceeding.”
Also obviously, NAR is “frustrated with” the DOJ.
NAR’s Troy Green said, “This is a complete, unprecedented breach of agreement by the Department of Justice to withdraw its consent from a fully negotiated settlement that had been approved by the head of the Antitrust Division and we had begun to implement.”
Green added, “NAR has fulfilled all of our obligations under the settlement agreement and now DOJ is inexplicably backing out. If the Department does not live up to its commitments under the terms of the agreement, we are confident in our pro-consumer and pro-competition policies.”
Perhaps a countersuit by NAR against the DOJ for withdrawing its proposed settlement may be in the offing?
We’ll definitely keep you posted as this “process” continues.
Thanks to Inman.
