FTC and DOJ Issue Report on Competition in the Real Estate Brokerage Industry
|May 11, 2007|
|Competition in the Real Estate Brokerage Industry [pdf]|
The Federal Trade Commission and U.S. Department of Justice (DOJ) issued a joint report, "Competition in the Real Estate Brokerage Industry." The purpose of the report is to inform consumers and others involved in the industry about important competition issues involving residential real estate, including the impact of the Internet, the competitive structure of the real estate brokerage industry, and obstacles to a more competitive environment.
"Home ownership is the American dream, and real estate brokers have helped to achieve that dream for many," said FTC Chairman Deborah Platt Majoras. "But when anticompetitive practices stand in the way, consumers lose. The FTC is committed to working with the industry and policymakers to ensure that competition is not inhibited and that consumers are well-informed about this important marketplace."
The report follows a workshop conducted by the agencies in October 2005, entitled "Competition Policy and the Real Estate Industry." The workshop focused on issues related to the competitiveness of the residential real estate industry and covered topics such as multiple listing services, online "virtual office Web sites," discount and fee-for-service brokers, and minimum service requirements. Panelists at the workshop included real estate brokers, state regulators, and academics. In addition, nearly 400 public comments were filed in response to the agencies’ request for public comment in connection with the workshop.
"The Antitrust Division seeks to educate industry participants and bring enforcement actions where necessary to ensure that consumers benefit from competition in this crucial sector of our economy," said Thomas O. Barnett, Assistant Attorney General for the Department of Justice’s Antitrust Division. "This report will help inform Americans about their real estate brokerage options and alert state legislatures and real estate commissions about the danger of enacting laws and regulations that harm competition."
As discussed in the report, the review by the FTC and the DOJ suggests that, although the real estate industry has undergone a number of substantial changes in recent years – particularly as a result of technological advances such as the Internet – competition in the industry has been hindered as a result of actions taken by some real estate brokers acting through multiple listing services and the National Association of Realtors, state legislatures, and state real estate commissions. In addition, consumers likely would benefit significantly from additional knowledge about the range of options available in brokerage services and fees. Based on their review, the FTC and the Department recommend the following to help maintain competition and protect consumers in the real estate brokerage industry: