FTC Busts Online Realtors On Antitrust Case
Posted by David A. Utter
The Austin Board of Realtors found itself on the receiving end of the Federal Trade Commission's ire due to the FTC's contention the Multiple Listing Service (MLS) used by the Board blocked the marketing of certain listings from the service.
As these listings were for "exclusive agency" agreements, which provide lower or no commissions to realtors, the FTC considered the banning of these listings as unlawfully restraining competition.
The FTC explained in a statement about the case that an exclusive agency listing is used to offer lower-cost, unbundled real estate brokerage services to consumers. By banning those listings from the MLS, the Austin Board caused many home sellers to switch from exclusive to traditional listings, and thus incur higher costs. From the FTC:
The Commission also contends that ABOR's Web site policy does not produce competitive efficiencies to balance its anticompetitive effects.
A consent order issued by the FTC will be in force for ten years to compel compliance with the FTC's findings. In response to the FTC's statement, the Austin Board's president and CEO, David Foster, took issue with its wording:
Foster continued, "The rule was initially established to ensure that our consumer Web site was used to promote listings to benefit members. We realized, however, that the rule was confusing and did not work as well as we'd intended, which was why it was rescinded so quickly. We are disappointed that the FTC's press release implies that we are guilty of wrongdoing -- which the agreement expressly contradicts -- and that the spirit of cooperation with which the FTC and ABoR negotiated the consent order did not translate to the FTC's public statement."
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Tag: Federal Trade Commission
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About the Author: David Utter is a staff writer for WebProNews covering technology and business.