Many of you have seen the updates regarding the recent verdict from the Federal Trade Commission (FTC) in their case against Realcomp. In December 2007, an administrative law judge found in favor of Realcomp. The FTC appealed that decision to the full commission and reversed the original decision.

Based on many of the articles that have been published on this subject, it is clear that there is a lot of misinformation and/or misunderstanding as to what the case was about. I want to offer an explanation of the case and the opportunity for you to ask any questions you may have as a result of this information clarification.

In 2006, Realcomp was notified that the FTC Bureau of Competition was conducting an investigation regarding particular MLS rules. This investigation involved several MLSs around the country including Realcomp. They were interested specifically in the rule that said exclusive agency listings submitted to the MLS would not be published on affiliated public web sites (i.e. REALTOR.com, MoveInMichigan.com, and IDX sites).

In October 2006, the FTC filed a formal complaint against Realcomp. Other complaints had also been filed against many other MLSs around the country – each ending with the MLS signing a consent decree to change their rules. The Board of Governors agreed that Realcomp should not be required to change this rule, since it is not in the best interest of our REALTOR^® customers. They felt strongly that since an exclusive agency listing gives the seller the option of bringing in their own buyer (at which point no commission would be paid), by publishing the listing on REALTOR.com for example, the seller could advertise their property using a site financially supported by REALTORS^® without any guarantee of compensation to a cooperating REALTOR^®. Realcomp allows, and has for some time, exclusive agency listings to be entered in the MLS. They continue to be available for all REALTORS^® to access via the MLS database.

After the first trial which was held in June 2007, the administrative law judge agreed with Realcomp and found that we were not in violation of restraint of trade as alleged by the FTC. However, the FTC appealed the decision to the full commission and that decision has now been reversed.

So, what’s next? Realcomp must now decide if we want to appeal this decision to the Sixth Circuit Court of Appeals or change our MLS rules and sign the consent decree. The Board of Governors will be meeting on November 20, 2009 to discuss this important subject. We will notify you of the results of this meeting.

I  hope this information helps. If you have questions or comments you want to share, you can reach me by email or by phone at 248-699-9120.