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Judge Dismisses Antitrust Lawsuit, Favors NAR Over Top Agent Network

NAR’s Clear Cooperation policy placed limits on pocket listings, leading a members-only “top agents” network for non-MLS listings to file a lawsuit. The ruling questioned some aspects of Clear Cooperation, but the judge said antitrust does not give TAN a right to “hoard listings among themselves.”

LOS ANGELES – Top Agent Network (TAN) filed a lawsuit against the National Association of Realtors® (NAR) and others, claiming an antitrust violation under NAR’s Clear Cooperation policy that placed new limits on pocket listings.

Exclusive listings must now be entered into the local MLS within one day after being publicly advertised, and MLS users who fail to do so could potentially lose access to their MLS.

In the case, U.S. District Judge Vince Chhabria ruled that TAN failed to show how NAR’s policy breaches antitrust law. He said TAN presented “a reasonable argument” for potential antitrust problems in some situations, but he also said, “TAN could never allege an antitrust injury from [NAR’s policy]” because the policy would improve the parts of TAN’s business model that make it anticompetitive.

He said NAR’s policy isn’t “anticompetitive to the extent that it prevents members of an exclusive listing service like TAN from concealing listings from NAR’s subscribers while simultaneously benefiting from access to NAR’s service.”

Under TAN’s business model, top agents in an MLS area shared listings among themselves first, however the “enter into the MLS within one day after publicly advertising” aspect of Clear Cooperation makes that difficult.

Chhabria also said that TAN is anticompetitive. Since it restricts membership to the top 10% of agents (by sales volume) in a market, it cannot use U.S. antitrust laws as a shield for its anticompetitive activities.

“The key pro-competitive benefit of [the MLS system] is that every NAR-affiliated MLS is open to any licensed real estate agent who is willing to pay the fees,” Chhabria said. He suggested that antitrust might be an issue for the courts to consider if another listing service was equally open to everyone.

Chhabria also noted that the top agents with membership in TAN earned that status working through the local MLS, and they “want to pull the ladder up behind them. … Instead of continuing to share listings with the open network of agents that supported their ascent, they would prefer to hoard choice listings among themselves.”

In a statement emailed to Inman News, TAN’s attorney – Paul T. Llewellyn, partner at Lewis & Llewellyn LLP – said the company was “exploring all available options to challenge” NAR’s Clear Cooperation Policy.

Source: Reuters (08/17/21) Scarcella, Mike; Inman News (08/17/21), Andrea V. Brambila

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