“The judge’s decision created a loophole that could allow associations to sidestep antitrust scrutiny by cloaking restrictive rules as optional,” the DOJ’s submitting states. The temporary could give REX a brand new leg up in its case.
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In a transfer that will have far-reaching implications, the Division of Justice (DOJ) has weighed in on the authorized case between The Actual Property Alternate (REX) and Zillow in a brand new temporary filed on Thursday that takes intention on the Nationwide Affiliation of Realtors’ (NAR) elective “no-commingling” rule.
The DOJ’s tackle the matter challenges a earlier ruling within the case from earlier this yr, which denied REX the chance of a retrial.
NAR’s “no-commingling” rule requires itemizing platforms that undertake it to separate MLS listings from non-MLS listings. In REX v. Zillow, low cost brokerage REX, which didn’t function inside an MLS whereas lively, argued that Zillow’s adoption of the “no-commingling” rule restricted REX’s visibility on the platform.
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On the core of the DOJ’s new temporary is the “no-commingling” rule’s “optional nature,” which the division states doesn’t forestall it from doubtlessly being anticompetitive. The DOJ additional argues that the sooner court docket choice denying REX a retrial didn’t absolutely consider that associations like NAR could have circumvented antitrust oversight by enacting such elective guidelines.
“The judge’s decision created a loophole that could allow associations to sidestep antitrust scrutiny by cloaking restrictive rules as optional,” the DOJ’s submitting states. The submitting additionally notes that though NAR states the “no-commingling” rule is elective, these entities that undertake the rule should achieve this in full for the reason that rule “cannot be modified,” based on the NAR Handbook.
In its temporary, the DOJ additional argued that Supreme Courtroom precedent has proven elective guidelines could contain “concerted action” that may make these guidelines “mandatory in practice.” Such elective guidelines may “invite others to participate in a common plan,” which the DOJ acknowledged, is basically the place REX’s court docket argument holds traction — in that the brokerage argued NAR, MLSs and in the end Zillow acquiesced to and complied with the “no-commingling” rule.
“This Court should vacate the judgment below and remand the case for the district court to fully consider whether there is adequate evidence of concerted action under this [common plan] theory,” the DOJ’s temporary reads.
REX sued Zillow after the itemizing portal modified its mannequin in 2021 by changing into a licensed brokerage so as to acquire direct entry to MLSs’ Web Information Alternate feeds.
At the moment, Zillow additionally grew to become a member of NAR and its brokers grew to become members of native MLSs. Because the majority of MLSs that Zillow and its brokers joined had adopted the “no-commingling” rule, Zillow was additionally required to abide by the rule within the areas the place these MLSs had been situated. In response, Zillow separated its search portal into two tabs, one for “Agent listings” and the opposite for “Other listings.”
REX’s listings had been relegated to the “Other listings” tab as a non-MLS member and the brokerage alleged that web page views of its listings on Zillow dropped by as a lot as 80 p.c after the change to Zillow’s web site went into impact.
Zillow was additionally hesitant to undertake the “no-commingling” rule, the DOJ’s temporary notes, however was compelled to take action so as to acquire entry to the MLS knowledge, which exhibits the burden of the market impression that MLS guidelines maintain.
“While Zillow disagreed with the rule, it complied to maintain access to MLS data,” the DOJ mentioned.
REX has not been operational since Might 2022 however has continued in its authorized battle. After the agency’s request for a retrial was denied in January, REX filed a movement the next month to enchantment the ruling.
The ball is now again within the Ninth Circuit’s court docket to find out whether or not or to not remand the case again to the District Courtroom to proceed proceedings. This newest assertion from the DOJ may very well be simply what REX must tip the scales in its favor and proceed to combat for what it sees as honest market entry with regards to promoting listings.
View the DOJ’s temporary in full right here.
