There has been a lot of speculation recently about the 2008 settlement agreement between the Department of Justice and the National Association of REALTOR® and what will happen when that agreement expires in November 2018. Much of this speculation misconstrues the settlement agreement, the practices it addresses, and what it accomplished. Here, I aim to break it down so that any future discussion about the fate of the settlement agreement, or the conduct of NAR and MLSs following expiration of the agreement, can be based on a correct understanding of that agreement.
The 2008 DOJ-NAR settlement agreement pertains specifically to NAR's MLS policy for brokers that operate virtual office websites, also called VOWs.
The scope of the 2008 settlement agreement is narrowly focused on a broker's operation of a virtual office website and the use of MLS listing data on such a site: Broker + VOW. Two critical components to any discussion invoking the 2008 settlement agreement.
A VOW is:
- a website operated by a broker;
- through which the broker is capable of providing real estate brokerage services;
- to consumers with whom the broker has first established a broker-consumer relationship, as defined by state law;
- where the consumer has the ability to search MLS data, subject to the broker's oversight, supervision, and accountability.
In 2003, NAR adopted a VOW policy that, among other things:
- Allowed brokers to opt out of having their listings displayed on the VOW sites of other brokers
- Prohibited VOWs from referring consumers to other real estate professionals for a fee
- Prohibited VOWs from displaying an advertisement for one broker on a page displaying the listing of another broker
The Department of Justice believed those three aspects of the VOW policy to be anticompetitive and initiated a two-year investigation that resulted in DOJ filing a lawsuit against NAR in 2005. The 2008 settlement agreement required NAR to replace the existing VOW policy with the Modified VOW Policy approved by the DOJ, and to take other actions described below. Significantly, the settlement agreement does not address or limit distribution of MLS or other property listing data to real estate portals, such as realtor.com or Zillow, or other third-party sites. It covers only the use of MLS listing data on VOW sites.