A Michigan federal judge on Thursday dismissed an antitrust complaint challenging multiple listing service (MLS) rules that limit access to realtor association members (an MLS aggregates and manages real estate listing data and facilitates cooperation among real estate agents and brokers). The court’s decision highlights the many pro-competitive benefits of the MLS and reaffirms the long-standing principle that trade and professional associations may reasonably tie access to certain benefits and services to association membership.
The case was filed by a Michigan lawyer who claims that a southeast Michigan MLS provider and its eight controlling realtor associations unreasonably restrained competition by restricting MLS access to members of one of the defendant associations. The plaintiff alleged that, although he is exempt from licensure under Michigan law, his application to become a member of a defendant realtor association was improperly denied because he was not a licensed real estate agent or broker, and has therefore been unable to access the MLS.
The court rejected the plaintiff’s argument that the tying arrangement substantially have benefits that the MLS offers as an “information-aggregating advertising platform.
“Data and choices breed competition,” the court explained, which “is precisely what the MLS does by providing customers with aggregated, streamlined information. Indeed, absent allegations of unfair discrimination, it is hard to imagine that any MLS is a net anticompetitive force or violates [Section 1 of the Sherman Act].
The court also explained that association rules that limit benefits to members do not always raise antitrust issues, explaining that “it is widely recognized that private organizations may reasonably tie their benefits and services to membership.” The plaintiff did not allege that the defendants restricted access to the MLS through unreasonable association membership requirements— here, a broker’s license and membership fees—or that defendants discriminatorily rejected the plaintiff’s membership application. Absent allegations of unreasonable or discriminatory conduct, the court concluded that the access rules did not amount to an illegal tying arrangement in violation of the Sherman Act. The court also held that the plaintiff failed to state a claim that the defendants illegally maintained monopoly power over the real estate market, and the court dismissed the case in its entirety.