New Brief from REX in Zillow Antitrust Case Concurs with DOJ Filing
REX brief calls out NAR for using incorrect facts to defend the anticonsumer segregation rule
Austin, Texas, August 16, 2021 – Today, REX filed a key brief in its lawsuit against Zillow and the National Association of Realtors (NAR). The brief supports the U.S. Department of Justice, which filed a brief in this case last week to correct misstatements made by the NAR in an attempt to shield further investigation into the trade association’s history of harming consumers and limiting competition
REX has long been the only industry player fighting real estate broker cartel policies which cost consumers thousands to tens of thousands of dollars on every transaction. Recently, the federal government has shown increased interest in the NAR’s anti-competitive antics, which REX has continued to challenge.
Quote from REX CEO & Co-Founder Jack Ryan:
“We appreciate the federal government weighing in to correct the National Association of Realtors’ disregard for the facts and consumers. We feel strongly about the merits of our case, which is likely why the National Association of Realtors has had to resort to using incorrect facts to inflate their case, the same way their broken brokerage policies increase costs for consumers.”
Quote from REX General Counsel Michael Toth:
"NAR’s response to the DOJ filing was a major swing and miss. Called out for mischaracterizing a previous settlement with the Justice Department, NAR doubled down on false assertions. While NAR attempted to use a now-expired consent decree regarding previous exclusionary, anti-consumer behavior, the reality is the National Association of Realtors continues to harm consumers, limit competition, and discriminate against pro-consumer, innovative platforms like REX.”
Quotes from REX’s brief filed August 16, 2021:
“The Complaint in this lawsuit alleges that Zillow’s decision to apply NAR’s IDX rules to discriminate against listing sources harms REX by depriving it access to the most important tool needed to reach potential homebuyers (the primary display on Zillow’s search results), and harms consumers by making it unlikely they will find home listings by innovative brokers seeking to reduce commissions they pay to buy a home. These were not issues addressed in any way by the 2008 Consent Decree.”
‘‘approve’—NAR to use the consent decree to shield from future investigation or challenge…”
“The 2008 Consent Decree, demonstrates that NAR “exclusionary policies targeting brokers using innovative online platforms” have the capacity to limit competition for real estate brokerage services…”
“NAR exclusionary rules that escaped scrutiny in the 2008 Consent Decree are being used to maintain high real estate commissions for NAR members despite the growing use of technology allowing consumers to bypass the services of a broker in searching for their new home…”
“As DOJ points out in its Statement of Interest, the real estate brokerage industry has seen significant changes since 2008 like the “massive growth of Zillow into an allegedly critical platform for marketing homes directly to consumers (as opposed to through a multiple listing service).” When the 2008 Consent Decree was entered, neither Zillow nor any other company was the dominant site for online residential real estate searches.”
The narrative around REX v Zillow, Trulia, and NAR comes on the heels of the DOJ decision to pull out of a Trump administration-era settlement with the NAR and reopen a broader investigation into the association and its member companies’ anticompetitive practices.
A copy of the REX Brief can be found here.
Highlights from the July 10 US DOJ filing include:
“ By claiming that the government “approved” the search policy in the attachment to the 2008 consent decree, see Doc. 93, NAR Reply in Support of Mot. To Dismiss 7-8, NAR implies that the government has determined that the policy—and by extension the No-Commingling Rule—is consistent with the antitrust laws. That implication, however, is incorrect.1 The 2008 consent decree resolved the United States’ antitrust claims against NAR for specific exclusionary policies targeting brokers using innovative online platforms…”
“In two other pending cases, NAR has tried similarly to use the 2008 consent decree to shield conduct that the government neither investigated nor challenged in the 2005 case that resulted in the decree.”
“No inference should be drawn from the 2008 consent decree that the No-Commingling Rule is consistent with the antitrust laws.”
A copy of the DOJ brief can be found here.
Additional Background on REX v. Zillow and NAR
REX’s lawsuit filed in March challenges Zillow’s recent web display change, which the platform made to comply with the NAR’s segregation and other rules. Zillow's web display once aggregated all homes for sale on a single web display This changed after Zillow announced it was becoming a real estate broker and joining NAR and other broker associations. Since locking arms with legacy brokers, Zillow redesigned its website and placed homes listed by innovators under a deceptively labeled "Other listings" tab, which actual consumers call the "hidden" tab, effectively screening listings with lower commissions from consumers.
Along with challenging NAR’s segregation rule, REX is contesting state rebate bans, which prevents the company from reducing real estate fees by giving rebates to cash-strapped home buyers. In both cases, REX is standing up for homebuyers, who are facing a housing market characterized by soaring prices and record low inventories. If REX is successful in both cases, home shoppers will have more choice and face fewer protectionist restrictions that make real estate commissions in the United States two to three times higher than around the world.
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