October 13, 2006
The Federal Trade Commission has charged two real estate groups operating multiple listing services in the Detroit, Michigan, area with illegally restraining competition by limiting consumers' ability to obtain low-cost real estate brokerage services.
The Commission also announced consent agreements with five other groups operating multiple listing services in parts of Colorado, New Hampshire, New Jersey, Virginia, and Wisconsin that have discontinued the challenged conduct.
According to the FTC, all seven groups adopted rules that withheld valuable benefits of the Multiple Listing Services (MLSs) they control from consumers who chose to enter into non-traditional listing contracts with real estate brokers.
Six of the seven blocked non-traditional, less-than-full-service listings from being transmitted by the MLS to popular Internet Web sites.
The seventh went further, adopting policies that include blocking such non-traditional brokerage contracts from the MLS entirely. Such policies limit home sellers' ability to choose a listing type that best serves their specific needs.
While five of the groups have entered into consent orders barring such conduct in the future, the two in Michigan have not, and the FTC has issued administrative complaints against them.
"Buying or selling a home is one of the biggest financial transactions most consumers will ever make," said Jeffrey Schmidt, Director of the FTC's Bureau of Competition. "The rules these brokers made drove up costs and reduced choice for consumers, and they violated federal law."
The two Michigan complaints will be heard by one or more Administrative Law Judges at the Commission, unless the charges are settled before the cases go to trial.
The consent orders settle the FTC's complaints against the other five associations, and will be subject to a 30-day public comment period before the Commission decides whether to make them final.
