Antitrust Law Applies to Associations, Realtors
A very non-legal definition: U.S. antitrust laws ban competitors from forming an alliance and “ganging up” on other businesses. A town’s two dominant brokerages, for example, can’t try to run a new entrant out of town.
WASHINGTON – U.S. antitrust laws prohibit an agreement, understanding or conspiracy among competitors that unreasonably restrains trade, according to the National Association of Realtors® (NAR). The philosophical goal is to give every new U.S. business a fair shot at success.
As a result, antitrust laws prohibit things like price-fixing agreements and group boycotts. A traditional example is a small town with two dominant brokerages that feel threatened by the entry of a new broker, perhaps one with a different type of business model. The established brokers cannot join forces to “fight” the new brokerage.
Realtor associations and MLSs play a major role in antitrust oversight because local, state and national organizations are, by definition, a group of Realtors working together. If an association agrees to ban or just ignore a type of business model or specific business, it may be an antitrust violation. For example, associations and MLSs should never come together to agree on fees charged to consumers or to collectively agree not to work with a particular business.
Boycotting is a unique arm of U.S. antitrust laws. In real estate, it could target a supplier or purchaser rather than a competitor.
A group choice not to deal with a vendor will be “treated as per se illegal whenever they involve the purposeful elimination or limitation of competition, regardless of the ultimate motive or objective of the alleged conspirators,” according to NAR. “For example, an agreement among several real estate firms not to employ the services of a particular printer to produce marketing materials, or to refuse to purchase advertising in a certain publication, may be an unlawful boycott of this type.”
Best practices for MLSs, associations, brokerages
- Adopt an antitrust policy and announce it often. Read it at the beginning of meetings and include the policy in meeting materials.
- Train agents and staff to identify antitrust issues and empower them to stop conversations during meetings or events that raise concern.
- Set and follow an agenda for all meetings, take accurate minutes and consider asking counsel to review before finalizing.
- Monitor social media pages and remove comments and discussions that are inconsistent with the association or brokerage’s antitrust policy.
Note: Information deemed accurate on date of publication
© 2022 Florida Realtors®