U. S. Court Rules No. KY MLS is not Anti-Competitive

MLS Membership Not Anticompetitive, U.S. Court Rules(December 13, 2005) --

In a decision that reaffirms the integrity of the country's REALTOR®-owned and operated multiple listing services, the U.S. District Court for the Eastern District of Kentucky dismissed an antitrust lawsuit brought by a real estate brokerage in northern Kentucky against the Northern Kentucky Association of REALTORS® and its subsidiary, the Northern Kentucky Multiple Listing Service.

The brokerage, Buyer's Corner Realty Inc. in Florence, Ky., and the firm's principal broker, Sherry Edwards—who served as plaintiffs in the case—claimed NKAR's rule requiring membership in a local REALTOR® association to access services of the MLS constitutes an unlawful tying arrangement and a group boycott that violates the federal Sherman Antitrust Act.

In its ruling, Judge William O. Bertelsman said the plaintiffs lack standing to bring an antitrust tying claim against the association because the harm the brokerage received—being forced to purchase membership in the REALTOR® association to gain access to the local MLS—doesn't rise to the level of antitrust injury. "Plaintiffs fail to explain how they have been harmed by any restrained competition in the tied product market," the judge said.

The plaintiffs also failed to show foreclosure in the market for the tied product, because the brokerage failed to show that other associations compete in the same product market as the REALTOR® association. The plaintiffs also failed to show the membership rule constituted an unlawful group boycott, because belonging to a REALTOR® association does not have an anticompetitive effect in the market for real estate association services.

To read the complete decision, go to Antitrust Lawsuit Against REALTOR® Association Dismissed at REALTOR.org. To learn more about a similar case in Wisconsin, see Federal Ruling in Wisconsin Finds No Evidence That MLS Membership Requirement Is Anti-Competitive, also at REALTOR.org.

Source: NAR