FTC Closes Door on Web Listings Case

The Federal Trade Commission (FTC) approved a final consent order today
forcing the Austin Board of Realtors (ABOR) to change a rule barring
discount brokers from listing properties on ABOR’s public Web sites.

The order prohibits ABOR from adopting or enforcing any
rules that treat one type of listing more advantageously than another
listing type.

The order also prohibits ABOR from interfering with the
ability of any of its members to enter into any type of lawful agreement
with home sellers.

In July, the FTC ruled the ABOR policy violated antitrust laws by preventing
consumers with potentially lower-cost real estate listing agreements access
to the group’s public Internet listings.

“ABOR’s Web site rules create significant roadblocks for real estate
brokers to offer consumers alternatives to full-service brokerage
agreements,” Jeffrey Schmidt, director of the FTC’s Bureau of Competition
said at the time.

The commission is not saying that one form of brokerage agreement is better
than another. We are saying that the consumer should be able to decide.”

The case began early last year when ABOR said it would not post home
listings from discount brokers on sites operated by the National Association
of Realtors (NAR) or the public site of ABOR.

The ABOR rule allowed only full commission listings on the NAR sites and the ABOR public site.

After the ruling, the FTC said some home sellers switched from a discount
broker to a full commission broker, also noting discount brokerage listings
on ABOR’s public sites fell from 18 percent to 2.5 percent.

The decline in discount listings, the FTC maintained, had an adverse effect
on consumers by limiting home sellers’ choices of brokerage services.

addition, the FTC alleged the ABOR rule denied homebuyers the opportunity to
use the Internet to see all the listings available in the Austin
metropolitan area.

Last year, the Department of Justice sued the NAR, charging it with engaging in anti-competitive behavior against online home brokers.

Concerned online sites competing with traditional Multiple Listings Services
might lead to lower commissions for real estate brokers, NAR three years ago
passed rules allowing traditional brick-and-mortar brokers to selectively
block their home listings to competing brokers using Virtual Office Websites

The DoJ objected to the policy, contending it denies consumers the full
benefits of competition, discourages commission discounting and threatens to
lock in outmoded business models.

The NAR changed its policy, barring brokers from selectively blocking their
listings. Instead, brokers are allowed to block listings, but they must either
block all Internet listings or none at all.

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