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High-Stakes Showdown in the Real Estate World

    The US Department of Justice is sounding the alarm, warning that a recent court ruling could set a damaging precedent and allow trade associations to circumvent antitrust laws. The case in question involves Zillow, which won a lawsuit against low-fee brokerage REX in 2023.

    At the heart of the dispute is NAR's "no-commingling" policy, which prohibits real estate sites from displaying MLS listings alongside non-MLS listings. While the policy is technically optional, DOJ attorney Alice Wang argued that its adoption can be seen as a concerted action, potentially veering into antitrust territory.

    Wang emphasized that the DOJ's involvement in the case is aimed at protecting the "legal framework for concerted action," which ensures coordinated actions between individuals or organizations don't violate antitrust laws. She suggested that the 2023 decision didn't consider alternative interpretations of the rule, which propose that the adoption of an optional rule can be an invitation for others to join a common plan.

    Representing REX, Ursula Ungaro argued that while the commingling rule is optional for MLSs, it's essentially mandatory for Zillow because the portal would otherwise lose access to the IDX feed. She claimed there was direct evidence of an agreement between NAR and Zillow to separate listings, which she described as an "anti-competitive scheme."

    However, attorneys for NAR and Zillow countered that the commingling rule is indeed optional and not an agreement with anyone to do anything. They argued that individual MLS policies required Zillow to separate out non-MLS listings, rather than any agreement between the parties.

    The DOJ's concerns are centered on the potential consequences of this ruling, which could allow trade associations like NAR to evade antitrust scrutiny by adopting optional rules. As Wang put it, "If we don't set aside this decision, future trade associations may use similar tactics to circumvent antitrust laws."