Commission Lawsuit Moves Forward

David Goldsmith

All Powerful Moderator
Staff member
NAR’s motion to dismiss broker fee lawsuit shut down
Country’s biggest brokerages accused of violating antitrust laws

A federal judge has denied a motion to dismiss a lawsuit over broker commissions on residential real estate deals.
A U.S. District Court judge threw out motions from the National Association of Realtors and some of the nation’s largest brokerages to dismiss the lawsuit, Inman reported. The judge ruled that the plaintiffs’ allegations show that they would have paid lower commissions if the current broker rules had not been in place, and that the rules established by NAR created an artificially high commission rate.

The lawsuit was originally filed in 2019 by a property seller, and is now seeking class action status. The complaint alleges that the sharing of commissions between the listing and buyer brokers leads to higher seller costs and violates the Sherman Antitrust Act.

NAR argued in its motion that the lawsuit misportrayed the rules for multiple listing services, and that the plaintiffs failed to show they suffered an “antitrust injury,” according to Inman.
But the judge who dismissed the motion disagreed, and wrote in his ruling that, “But-for Defendants’ conspiracy, each plaintiff would have paid substantially lower commissions.”
“As the case moves forward, we intend to demonstrate how the MLS system creates competitive, efficient markets that benefit home buyers and sellers as well as small business brokerages,” a NAR spokesperson told Inman.

The other defendants in the lawsuit are HomeServices of America, Keller Williams, RE/MAX, Realogy, Long & Foster Companies HSF Affiliates. Those firms backed NAR’s motion to dismiss the suit, and those requests were also dismissed by the judge.
 

David Goldsmith

All Powerful Moderator
Staff member
NAR hit with another antitrust lawsuit over commissions and MLS rules
Proposed settlement aims to bring more transparency and competition to the industry

The National Association of Realtors has once again had its competitive practices called into question — this time by the federal government.
The Department of Justice announced Thursday that it filed a lawsuit against the trade association, alongside a proposed settlement, that takes aim at NAR’s “anticompetitive rules, policies, and practices,” according to a DOJ release.

The proposed settlement from the Antitrust Division mandates that NAR change rules that currently allow brokers to withhold information from prospective homebuyers regarding fees and commissions. The proposed changes must also carry over to multiple listing services associated with NAR.
“If approved, the settlement will enhance competition in the real estate market, resulting in more choice and better service for consumers,” the DOJ release said.

In a statement to Inman, NAR said it disagreed with the DOJ’s characterization and admitted no wrongdoing, but had reached an agreement and “fully resolved” the issues raised. A spokesperson added that the organization remained “focused on supporting our members as they preserve, protect and advance the American dream of homeownership.”

The goal of the settlement is to allow for more transparency — and thus competition — in the real estate market, which could result in more choices and better service for homebuyers. The agreement still awaits approval from the court.

“Home buyers and sellers should be aware of all the broker fees they are paying. Today’s settlement prevents traditional brokers from impeding competition — including by internet-based methods of home buying and selling — by providing greater transparency to consumers about broker fees,” Makan Delrahim, assistant attorney general of the DOJ’s Antitrust Division, said in a statement. “This will increase price competition among brokers and lead to better quality of services for American home buyers and sellers.”
With 1.4 million members, NAR has a wide scope of influence. It establishes and enforces policies for agents who belong to the organization, along with affiliated multiple listing services.

NAR has previously come under fire for its alleged anti-competitive practices, with several antitrust lawsuits filed against the organization in recent years.
 

David Goldsmith

All Powerful Moderator
Staff member

DOJ pulls out of NAR antitrust settlement to pursue further investigation​

Realtor trade group calls sudden reversal an “unprecedented breach”​

The Justice Department has abandoned its settlement with the National Association of Realtors, signaling that it intends to conduct a “broader investigation” into the trade group’s practices.
In an abrupt reversal Thursday, the DOJ withdrew its consent to a proposed settlement of an antitrust action brought against the NAR last year and instead filed to voluntarily dismiss its civil complaint without prejudice.

The complaint was filed last November, alongside a proposed settlement that would require NAR to repeal and modify certain “anti-competitive” practices, such as withholding information about broker fees or enabling buyers’ brokers to filter MLS listings based on commissions offered.

The proposed settlement would have prevented the DOJ from pursuing other antitrust claims regarding NAR policies, it said in a statement Thursday.
“Because the settlement resolved only some of the department’s concerns with NAR’s rules, this step ensures that the department can continue to enforce the antitrust laws in this important market,” the statement read.

But that explanation raises questions, because the proposed settlement, which is public, included a clause that specifically reserved the government’s rights to investigate and pursue further antitrust violations by NAR or its members.

When asked to identify what language limited the government’s ability to pursue future claims, a DOJ spokesperson said “we cannot get into the specifics of the modified language discussed.”
NAR called the DOJ’s decision an “unprecedented breach” in a statement to Bloomberg on Thursday.

“NAR has fulfilled all of our obligations under the settlement agreement, and now DOJ is inexplicably backing out,” the association told the publication. NAR did not respond to a request for comment on Friday.
An antitrust practitioner who has served in the government in the past said the DOJ’s “stated motivation is questionable.”

“The Justice Department should explain this further given the clear carve out,” said the person, who agreed to speak on condition of anonymity.
The DOJ spokesperson declined to comment on whether the antitrust division is pursuing any other cases against NAR at this time.
 
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