Ten years ago, on November 18, 2008, a settlement agreement between NAR and the Department of Justice (DOJ) went into effect, establishing a policy focused on a broker’s operation of a Virtual Office Website (VOW). The agreement only applied to VOWs and did not reach other types of online listing display such as those governed under Internet Data Exchange (IDX) rules.
In contemplating the agreement, the DOJ wanted to ensure that NAR policies did not suppress technological innovation, reduce competition on price and quality, or reduce efficient cooperation among brokers.
Over the last 10 years, NAR created policies that have given consumers unprecedented access to listing data while empowering the brokerage community to adopt and leverage the power of the internet. This includes policies to allow search engines to more easily index listing data, the ability to publish listing data on social media feeds, and the ability to co-mingle listing data from multiple MLSs.
Because the ability to display listings online is now commonplace and affordable to the industry as a whole, the anticompetitive forces that threatened the existence of VOWs has largely disappeared.
While the settlement agreement expired on November 18, 2018, NAR continues to keep VOW policy in place as outlined in the agreement. Any future proposals for modification would be scrutinized to ensure that they are not only helpful to the industry, but also steer clear of any potentially anticompetitive implications.
Today, just as was the case 10 years ago, VOWs represent a very small percentage of active broker-operated websites. Although there is no centralized registry of active VOWs nationwide, conversations with various MLSs have shown that VOWs often make up less than 0.1% of data feeds in certain marketplaces. IDX continues to be the favored method for displaying listing data.
Despite low usage of VOWs, MLSs must remain committed to ensuring that brokers seeking to establish a VOW are able to obtain timely access to MLS data.
The work of the real estate industry and MLSs should not end at meeting the minimum requirements of the VOW policy. Keeping the DOJ’s initial concerns in mind, we should commit to supporting an environment where innovation, competition, and cooperation continue to thrive.
Technological Innovation, Competition and Efficient Cooperation Between Brokers
Just as is the case with real estate technology providers, competition and innovation amongst brokerages is robust and continues to increase at a rapid pace. New and evolving business models are increasingly making an argument to change categories from the “exception” into the “rule.” MLSs can help by continuing to facilitate new technologies by increasing access to data and focusing on consumer experience through service offerings to the membership.
Aside from facilitating cooperation and compensation in the transfer of real property, MLSs are an essential partner for brokerages seeking to innovate their cooperation efforts through the handling of listing data. Ensuring fast and efficient access to quality, reliable, standardized data will allow brokerages and their technology partners to innovate and shape the cooperation landscape of the future.
In 1923, Harry Nightingale, Chair of the California State Association Multiple Listing Committee, said “The cooperation that [the MLS] calls for has changed the spirit of the membership from one of 'Each for Himself,' to 'Each for the Other.'” These powerful words still ring true today, and are equally applicable to members and the MLSs and Associations that serve them.