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After NAR's commission-splitting lawsuit settlement, Zillow's new antitrust suit against two MLSs over their ShowingTime service suggests that MLSs can no longer exclude competitors. In today's email, we'll discuss how the real estate industry faces increasing scrutiny, and why associations must rethink their promotion of proprietary services to avoid further legal challenges.

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Now, let's dig in!

The ShowingTime Settlement Is Yet Another Blow to MLS Monopolies

The landmark NAR settlement has only begun reshaping the residential real estate industry. Whether you believe Realtor associations qualify as a price-gouging conspiracy or not, the larger message being delivered by the courts is that real estate associations cannot dictate industry practices. NAR has settled the commission-splitting lawsuit, and its member MLSs were spared damages. But, this does not mean that every MLS can return to business as usual.

Now, another lawsuit is being settled, this time by an MLS. The antitrust suit was brought by Zillow last year over its ShowingTime property showing software and service. Zillow claimed that two MLSs, one in Arizona and one in Wisconsin, conspired to “exclude or severely limit” their service to members while promoting a showing platform owned in part by the MLSs instead.

The details of the settlement have yet to be shared, but the fact that the case is being settled indicates that the MLSs in question did not like their chances of fighting these charges in court. The real estate industry has long had many de facto monopolies due to the power that MLSs have over listings and, therefore, brokers. Now, it seems that MLSs will no longer be able to promote their proprietary services without allowing competitors on their platforms.

We could see many more of these kinds of suits aimed at loosening MLSs' tight grip on real estate services. There are plenty of other examples of possible unfair business practices that could be seen as collusion. Most MLSs integrate with SentriLock, pushing members to use it as their showing lockbox. However, SentriLock is owned by NAR, creating a conflict of interest in steering members to the service.

If real estate associations want to avoid seemingly inevitable antitrust lawsuits, they will need to rethink how they require and promote certain services to their members. The “this is how it has always been done” defense does not seem to have any sway in today’s legal system, and MLSs and Realtor associations alike will have to change their ways before they are forced to do so by yet another legal challenge.

Groundbreaking

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