On June 5, 2018, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) held a workshop to explore competition issues in the residential real estate brokerage industry. The Council of Multiple Listing Services (CMLS) submitted a white paper, Data and Choices Breed Competition, highlighting the pro-competitive role of Multiple Listing Services (MLSs) in the residential real estate industry. Real estate brokers who participate in an MLS enter into an agreement to share their listing information in exchange for access to other brokers’ listings, and all participating brokers also agree to pay a commission to any cooperating broker who causes the sale of one of their listed properties.
CMLS emphasizes that MLSs are a rare example of “coopetition,” cooperating in a way that enhances, rather than stifles, competition. Because the MLS creates a gathering of competing brokers with incentives to promote their competitors’ listings, home buyers are presented with a wide array of choices, and home sellers’ listings are viewed by a wider audience. MLS organizations facilitate this process, ensuring that the listing data is accurate and complete by enforcing rules regarding data quality and timeliness, and by requiring participating brokers to exchange all of their listings within the geographic area.
Although some have argued that access to the listing content compiled by MLSs should be made available to third parties for open and unrestricted use, CMLS contends that this will harm consumers and the real estate industry in a variety of ways. Forced listing distribution would be a misguided regulatory policy because it ignores the fact that the listing content is subject to contractual and copyright restrictions, would entail the creation of bureaucracy to manage the data of 600 MLSs and thousands of brokerage firms, and would decrease market efficiency and increase consumer costs when real estate referral companies are founded which do nothing more than direct consumers to local brokers. Aside from these negative consequences, MLSs already form useful partnerships with third parties that offer something of value in exchange for listing information, to the greater benefit of consumers. Third parties that offer nothing in exchange for MLS data, which includes brokers’ original content marketing and presenting the listings, should not gain the same advantages at no cost.
CMLS takes the position that government regulation is not needed to widely distribute real estate listing data for the benefit of the home buying and selling public. Instead, by voluntarily exchanging information through MLSs, brokers remain competitive with one another while expanding the choices available to consumers engaging in real estate transactions.