MICHIGAN REALTORS’ GROUP REDUCED COMPETITION BY RESTRICTING ACCESS TO ITS MULTIPLE LISTING SERVICE

On November 2, 2009, the Federal Trade Commission (“FTC”) released an opinion stating that the Realcomp II (“Realcomp”), a real estate multiple listing service (“MLS”) serving southeast Michigan, took part in anticompetitive practices by restricting some of its members access to its database.
An MLS is a database that includes members’ home listings information. Members are allowed to communicate amongst themselves as well as search through all of the home listings available in the area through the database. As such, access to a multiple listing service database is critical for any broker to service clients efficiently.

According to the FTC, Realcomp excluded listings of brokers who offered discounts. For example if a user was to search the public website for Realcomp, only listings of the full-service real estate brokers, who make up the majority of Realcomp’s membership, would show up. The FTC cited the Schumpeterian concept of “creative destruction” by stating that Realcomp was enabling its full-service real estate brokers to maintain their competitive advantage and disallowing newly innovated methods developed by members offering discounts which had the potential of “changing the [competitive] game.” According to the FTC, Realcomp’s actions hindered the competitive process and narrowed consumer choice.

The FTC’s final order requires Realcomp to stop its discriminating policies towards members offering innovative discounts within 30 days and inform its members of the changes within 90 days. It also requires Realcomp to place a statement of changes to its regulations and policies on its website.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com