Real Estate Brokerage Brings Antitrust Claims Against MLS Over Prohibition on Private Listings

A large national real estate brokerage has sued a multiple listing service (MLS) over the latter’s prohibition on brokerages offering private property listings which are not posted to the MLS.

MLSs are databases of real estate listings which real estate brokerages use to share information about properties for sale within a particular region.  The suit alleges that the MLS at issue is effectively the only MLS in its area (covering King County and the city of Seattle in Washington state), that almost 100% of property listings in the area are posted to this MLS, and that brokerages in the area cannot realistically operate without access to the MLS.  The complaint alleges that the MLS requires—as a condition of access—that brokerages must post all of their property listing to the MLS and that brokerages cannot offer private property listings which are not posted to the MLS.  The MLS claims that this policy is necessary because restricting information about available homes is unfair, exclusionary, and discriminatory.  However, most MLSs across the country do not have a comparable rule.

The brokerage asserts that it wants to offer customers the option to have private listings which are not initially posted to an MLS.  Purported reasons why customers might want this option include: testing possible prices and gaining insights into what might be a reasonable starting offer price; gaining feedback on how prospective buyers view the property and whether any pre-listing home improvements are needed; protecting privacy and confidentiality (e.g., not publicly posting photos of the interior of one’s home); and avoiding public price reductions or accumulated days on the market if the property is posted to the MLS too soon.  The brokerage claims that the MLS is controlled by other large local real estate agencies in the area with traditional business models, and that they allegedly use the policy to stifle competitors that want to develop innovative business practices.

The brokerage alleges that the MLS is a monopolist due to its almost total control over the local market for real estate property listings, and that it is not feasible for an alternative listing service to enter the local market.  The MLS’s policy allegedly stifles competition among real estate brokerages, reduces consumer choice and service quality, and quashes innovation.  The brokerage brings claims under federal and Washington state antitrust laws and laws prohibiting anti-competitive behavior, as well as for tortious interference with contracts and business expectancy due to how the MLS’s rule prohibits the brokerage from doing business with customers who want a private listing.  The brokerage is seeking, among other remedies, injunctive relief to end the practice and trebled compensatory damages.