United States v. National Association of Realtors®; Proposed Final Judgment and Competitive Impact Statement, 36104-36118 [E8-13902]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 73, Number 123 (Wednesday, June 25, 2008)]
[Notices]
[Pages 36104-36118]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-13902]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


United States v. National Association of Realtors[supreg]; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the Northern District of Illinois in 
United States of America v. National Association of Realtors[supreg], 
No. 05-C-5140. On September 8, 2005, the United States filed a 
Complaint alleging that the National Association of Realtors[supreg] 
(``NAR'') violated section 1 of the Sherman Act, 15 U.S.C. 1, by 
adopting policies that suppress competition from real estate brokers 
who use password-protected ``virtual office Web sites'' or ``VOWs'' to 
deliver high-quality brokerage services to their customers. The 
proposed Final Judgment, filed on May 27, 2008, requires NAR to repeal 
the challenged policies and to adopt new rules that do not discriminate 
against brokers who use VOWs.
    Copies of the Amended Complaint, proposed Final Judgment and 
Competitive Impact Statement are available for inspection at the 
Department of Justice, Antitrust Division, Antitrust Documents Group, 
450 5th Street, NW., Room 1010, Washington, DC 20530 (telephone: 202 
514-2481), on the Department of Justice's Web site at https://
www.usdoj.gov/atr, and at the Office of the Clerk of the United States 
District Court for the Northern District of Illinois. Copies of these 
materials may be obtained from the Antitrust I Division upon request 
and payment of the copying fee set by Department of Justice 
regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be addressed 
to John R. Read, Chief, Litigation III section, Antitrust Division, 
U.S. Department of Justice, 450 5th Street, NW., Suite 4000, 
Washington, DC 20530, (202) 307-0468.

J. Robert Kramer II,
Director of Operations, Antitrust Division.

United States District Court for the Northern District of Illinois 
Eastern Division

United States of America, Department of Justice, Antitrust Division, 
325 7th Street, NW., Suite 300, Washington, DC 20530.
Plaintiff,

v.

National Association of Realtors, 430 North Michigan Ave., Chicago, 
IL 60611, Defendant.

Civil Action No. 05C-5140,
Judge Filip,
Magistrate Judge Denlow,
Filed: October 4, 2005.

Amended Complaint

    The United States of America, by its attorneys acting under the 
direction of the Attorney General, brings this civil action pursuant 
to section 4 of the Sherman Act, as amended, 15 U.S.C. 4, to obtain 
equitable and other relief to prevent and restrain violations of 
section 1 of the Sherman Act, as amended, 15 U.S.C. 1. The United 
States alleges:
    1. The United States brings this action to enjoin the defendant 
a national association of real estate brokers--from maintaining or 
enforcing policies that restrain competition from brokers who use 
the Internet to more efficiently and cost effectively serve home 
sellers and buyers, and from adopting other related anticompetitive 
rules.
    2. The brokers against whom the policies discriminate operate 
secure, password-protected Internet sites that enable the brokers' 
customers to search for and receive real estate listings over the 
Internet. These Web sites thus replace or augment the traditional 
practice by which the broker conducts a search of properties for 
sale and then provides information to the customer by hand, mail, 
fax, or e-mail. Since these Web sites were first developed in the 
late 1990s, brokers' use of the Internet in connection with their 
delivery of brokerage services has become an important competitive 
alternative to traditional ``brick-and-mortar'' business models.
    3. Defendant's members include traditional brokers who are 
concerned about competition from Internet-savvy brokers. Before 
defendant adopted its policies, several of its members voiced 
opposition to brokers' delivery of listings to customers through 
their Web sites--sites that defendant referred to as ``virtual 
office Web sites,'' or ``VOWs.'' The head of the working group 
created by defendant to develop regulations for VOWs argued that 
defendant should act quickly in adopting regulations for the use of 
these Web sites because brokers operating VOWs were ``scooping up 
market share just below the radar.'' The chairman of the board of 
RE/MAX, the nation's second-largest real estate franchisor, publicly 
expressed his concern that these Internet sites would inevitably 
place downward pressure on brokers' commission rates. One broker 
complained that because of the lower cost structure of brokers who 
provide listings to their customers over the Internet, ``they are 
able to kick-back 1% of the sales price to the buyer.'' And Cendant, 
the nation's largest real estate franchisor and owner of the 
nation's largest real estate brokerage, asserted in a widely 
circulated white paper that it was ``not feasible'' for even the 
largest traditional brokers to compete with large Internet companies 
that operated or affiliated with brokers operating VOWs.
    4. In response to such concerns, defendant, through its members, 
adopted a policy (the ``Initial VOW Policy'') limiting this new 
competition. The Initial VOW Policy has been implemented in many 
markets. After plaintiff informed NAR of its intention to bring this 
action, NAR announced that it had modified this policy (the 
``Modified VOW Policy''). Plaintiff challenges both policies in this 
action as part of a single, ongoing contract, combination, or 
conspiracy.
    5. These policies significantly alter the governing multiple 
listing services (``MLSs''). MLSs collect detailed information about 
nearly all properties for sale through brokers and are indispensable 
tools for brokers serving buyers and sellers in each MLS's market 
area. Defendant's local Realtor associations (``member boards'') 
control a majority of the MLSs in the United States.
    6. Defendant's VOW Policies permit brokers to withhold their 
clients' listings from VOW operators by means of an ``opt-out'' 
right. In essence, the policies allow traditional brokers to block 
the customers of web-based competitors from using the Internet to 
review the same set of MLS listings that the traditional brokers 
provide to their customers.
    7. The working group that formulated defendant's Initial VOW 
Policy understood that the opt-out right was fundamentally 
anticompetitive and harmful to consumers. Two members of the working 
group wrote that the opt-out right would be ``abused beyond belief'' 
as traditional brokers selectively withhold listings from particular 
VOW-based competitors. The chairman of the working group admitted 
that the opt-out right was likely to be exercised by brokers 
notwithstanding the fact that ``it may not be in the seller[']s best 
interest to opt out.'' But he took comfort in the fact that the rule 
did not require brokers to disclose to clients that their listings 
would be withheld from some prospective purchasers as a result of 
the

[[Page 36105]]

brokers' opt-out decision, thus providing brokers ``flexibility 
without conversation.''
    8. Defendant's VOW Policies restrict the manner in which brokers 
with efficient, Internet-based business models may provide listings 
to their customers, and impose additional restrictions on brokers 
operating VOWs that do not apply to their traditional competitors. 
Defendant thus denies brokers using new technologies and business 
models the same benefits of MLS membership available to their 
competitor brokers, and it suppresses technological innovation, 
discourages competition on price and quality, and raises barriers to 
entry. Defendant--an association of competitors--has agreed to 
policies that suppress new competition and harm consumers.

Jurisdiction and Venue

    9. This Complaint is filed under section 4 of the Sherman Act, 
as amended, 15 U.S.C. 4, to prevent and restrain violations by 
defendant of section 1 of the Sherman Act, 15 U.S.C. 1. This Court 
has subject matter jurisdiction over this action under 28 U.S.C. 
1331, 1337(a), and 1345.
    10. Venue is proper in this district under 28 U.S.C. 1391(b) 
because defendant maintains its principal place of business in 
Chicago, Illinois, and is found here.

Defendant

    11. Defendant National Association of Realtors (``NAR'') is a 
trade association organized under the laws of Illinois with its 
principal place of business in Chicago, Illinois. NAR establishes 
and enforces policies and professional standards for its over one 
million individual member brokers and their affiliated agents and 
sales associates (``Realtors''), and 1,600 local and state member 
boards. NAR's member brokers compete with one another in local 
brokerage services markets to represent consumers in connection with 
real estate transactions.

Concerted Action

    12. Various others, not named as defendants, have contracted, 
combined, or conspired with NAR in the violations alleged in this 
Complaint and have performed acts and made statements in furtherance 
thereof.

Trade and Commerce

    13. NAR's policies govern the conduct of its members in all 
fifty states, including all Realtors and all of NAR's member boards. 
NAR's member boards control approximately eighty percent of the 
approximately 1,000 MLSs in the United States.
    14. NAR's activities, and the violations alleged in this 
Complaint, affect home buyers and sellers located throughout the 
United States.
    15. NAR, through its members, is engaged in interstate commerce 
and is engaged in activity affecting interstate commerce.

Relevant Markets

    16. The provision of real estate brokerage services to sellers 
of residential real property and the provision of real estate 
brokerage services to buyers of residential real property are 
relevant service markets.
    17. The real estate brokerage business is local in nature. Most 
sellers prefer to work with a broker who is familiar with local 
market conditions and who maintains an office or affiliated sales 
associates within a reasonable distance of the seller's property. 
Likewise, most buyers seek to purchase property in a particular 
city, community, or neighborhood, and typically prefer to work with 
a broker who has knowledge of the area in which they have an 
interest. The geographic coverage of the MLS serving each town, 
city, or metropolitan area normally establishes the outermost 
boundaries of each relevant geographic market, although meaningful 
competition among brokers may occur in narrower local areas.

Background of the Offense

    18. At any one time there are over 1.5 million homes for sale in 
the United States. Most home sellers and buyers engage residential 
real estate brokers to facilitate transactions.
    19. The predominant form of payment for brokerage services is a 
``commission,'' a percentage of the price paid for the property. In 
a typical transaction, the seller agrees to pay a commission to the 
broker who has contracted with the seller to market the home (the 
``listing broker''). If the listing broker finds the buyer, the 
listing broker keeps the full commission. Frequently, however, a 
second broker (the ``cooperating broker'') finds the buyer, and the 
two brokers share the commission.
    20. After a listing broker has established an agency 
relationship with a seller, the broker typically submits detailed 
information regarding the seller's property to a local NAR-
affiliated MLS. Along with the information about the property it 
submits to the MLS, the listing broker also typically includes an 
offer to split the commission with any cooperating broker.

Multiple Listing Services

    21. MLSs are joint ventures among competing brokers to share 
their clients' listings and to cooperate in other ways. MLSs list 
virtually all homes for sale through a broker in the areas they 
serve. In a substantial majority of markets, a single MLS provides 
the only available comprehensive compilation of listings. The MLS 
allows brokers representing sellers to effectively market the 
sellers' properties to all other broker participants in the MLS and 
their buyer customers. Conversely, the MLS allows brokers to provide 
their buyer customers information about all listed properties in 
which the customers might have an interest.
    22. NAR promulgates rules governing the conduct of MLSs and 
requires its member boards to adopt these rules.
    23. The vast majority of brokers believes that they must 
participate in the MLS operating in their local market in order to 
adequately serve their customers and compete with other brokers. As 
a result, few brokers would withdraw from MLS participation even if 
the fees or other costs associated with that participation 
substantially increased.
    24. By virtue of industry-wide participation and control over a 
critically important input, the MLS (a joint venture of competing 
brokers) has market power in almost every relevant market.
    25. The methods of making MLS information available to customers 
have changed as technology has evolved. From the l920s, when MLSs 
first became prevalent, brokers allowed customers to view a printed 
``MLS book.'' Later, the availability of copy machines allowed 
brokers to reproduce pages from the MLS book and deliver the pages 
with responsive listings to customers by hand or mail. The advent of 
facsimile transmission--and, later, electronic mail--further 
quickened the process of delivering MLS listings to customers.

Virtual Office Web Sites

    26. With the development of the Internet as an information 
source for consumers, potential home buyers began to seek Internet 
sources of information about homes for sale. Beginning in the late 
1990s, a number of NAR member brokers began creating password-
protected Web sites that enabled potential home buyers, once they 
had registered as customers of the broker and agreed to certain 
restrictions on their use of the data, to search the MLS database 
themselves and to obtain responsive MLS listings over the Internet. 
These Web sites came to be known as virtual office Web sites or 
VOWs. NAR recognizes the Internet delivery of MLS listings to 
customers to be an authorized method of providing brokerage 
services.
    27. Brokers can use the Internet to operate more efficiently 
than they can by using only traditional methods. By transferring 
search functions from the broker to customers who prefer such 
control over the process, VOW-operating brokers allow customers to 
educate themselves at their own pace about the market in which they 
are considering a purchase. By doing so, brokers with successful 
password-protected Web sites are able to reduce or eliminate the 
time and expense involved in identifying and providing relevant 
listings and otherwise educating their customers. These brokers also 
spend less time on home tours with their buyer customers, as these 
buyers frequently tour fewer homes before making a purchase decision 
than typical buyers. With lower cost structures, brokers with 
Internet-intensive business models have offered discounted 
commissions to sellers or commission rebates to buyers.
    28. Other sources of listing information on the Internet are 
inferior to the password-protected VOWs because they do not and 
cannot guarantee access to all information available in the MLS.
    29. Brokers can also use the Internet to support a ``referral'' 
business model. Referral services provide brokers information about 
potential buyers in return for a share of any commission the broker 
receives if the ``lead'' results in a completed transaction. Brokers 
are not obliged to purchase leads from referral services and do so 
only when they choose to. Some traditional brokers refer customers 
to other brokers for a fee, and some VOW operators, similarly, have 
referred (or have considered referring) some of their customers to 
other brokers for a fee. Many brokers dislike the concept of paying 
for leads, and the prospect that Internet-savvy brokers could 
support referral business

[[Page 36106]]

models has been a source of industry antipathy to VOWs.

Nature of the Offense

    30. Brokers with innovative, Internet-based business models 
present a competitive challenge to brokers who provide listings to 
their customers only by traditional methods. Many brick-and-mortar 
brokers fear the ability of VOW operators to use Internet technology 
to attract more customers and provide better service at a lower 
cost.
    31. In response to concerns raised by certain NAR members about 
this new form of competition, NAR's Board of Directors voted on May 
17, 2003, to adopt the ``Initial VOW Policy,'' a ``Policy governing 
use of MLS data in connection with Internet brokerage services 
offered by MLS Participants (`Virtual Office Web sites').'' Prior to 
the filing of the Complaint in this action, NAR had mandated that 
all 1,600 of its member boards implement the Initial VOW Policy by 
January 1, 2006. Approximately 200 member boards implemented the 
Initial VOW Policy and received NAR's approval of their implementing 
rules.
    32. Section 1.3 of the Initial VOW Policy contains an opt-out 
provision that forbids any broker participating in an MLS from 
conveying a listing to his or her customers via the Internet without 
the permission of the listing broker. Specifically, the opt-out 
provision allows brokers to direct that their clients' listings not 
be displayed on any VOW (a ``blanket opt-out''), or on a particular 
competing broker's VOW (a ``selective opt-out'').
    33. In contrast, prior to NAR's adoption of the Initial VOW 
Policy, a broker could provide any relevant listing in the MLS 
database to any customer--by whatever method the customer or broker 
preferred, including via the Internet. Nearly all of NAR's member 
boards had also adopted rules requiring all participants in their 
affiliated MLSs to submit, with minor exceptions, all of their 
clients' listings to the MLS. More importantly, NAR did not permit 
any broker to withhold his or her clients' listings from a rival.
    34. In several of the markets in which NAR's member boards have 
implemented the Initial VOW Policy, brokers have already exercised 
their opt-out rights to withhold their clients' listings from the 
customers of brokers operating VOWs, as well as from brokers who 
will use password-protected Web sites to provide listings to their 
customers in the future. In at least one such instance, an 
innovative broker discontinued operation of his Web site because all 
of his competitor brokers had opted out, making him unable to 
effectively serve his customers through operation of his site.
    35. Section II.4.g of the Initial VOW Policy contains an ``anti-
referral'' provision that, with minor exceptions, forbids VOW 
operators from referring their customers to ``any other entity'' for 
a fee. In contrast, no NAR rule limits referrals for a fee by 
brokers who do not convey MLS listings to customers over the 
Internet.
    36. The Initial VOW Policy includes other provisions that impose 
greater restrictions and limitations on brokers with Internet-based 
business models than on traditional brokers. For example, under 
section IV.I.b of the Initial VOW Policy, NAR's member boards may 
forbid VOW operators from displaying advertising on any Web site on 
which MLS listings information is displayed. In contrast, no NAR 
rule limits the ability of traditional brokers to include 
advertisements in packages of printed listings they provide to their 
customers.
    37. The Initial VOW Policy also contains provisions to make it 
obligatory and enforceable. Section I.4 of the Initial VOW Policy 
expressly forbids NAR's member boards from adopting rules ``more or 
less restrictive than, or otherwise inconsistent with'' the Initial 
VOW Policy, including the opt-out provisions and the anti-referral 
provision. Appendix A to the Initial VOW Policy provides for 
remedies and sanctions for violation of the Policy, including 
financial penalties and termination of MLS privileges.
    38. On September 8, 2005, after plaintiff informed NAR of its 
intention to bring this action, NAR advised its member boards to 
suspend application and enforcement of the above-referenced 
provisions of the Initial VOW Policy, and announced its adoption of 
a new ``Internet Listings Display Policy'' and its revision of an 
MLS membership policy (together, the ``Modified VOW Policy''). NAR's 
Modified VOW Policy continues to impede brokers from using the 
Internet to serve home sellers and buyers more efficiently and cost 
effectively. NAR's Modified VOW Policy mandates that all of NAR's 
member boards enact rules implementing the Internet Listings Display 
Policy by July 1, 2006, but NAR subsequently communicated to its 
member boards that they ``wait to adopt'' the policy ``until th[is] 
litigation is over.''
    39. Section 1.3 of the Modified VOW Policy contains a blanket 
opt-out provision that forbids any broker participating in an MLS 
from conveying a listing to his or her customers via the Internet 
without the permission of the listing broker. Specifically, the opt-
out provision allows brokers to direct that their clients' listings 
not be displayed on any competitor's Internet site. When exercised, 
this provision prevents a broker from providing over the Internet 
the same MLS information that brick-and-mortar brokers can provide 
in their offices. Additionally, NAR's Modified VOW Policy 
specifically exempts its own ``Official Site,'' Realtor.com, from 
the blanket opt-out that applies to all Internet sites operated by 
brokers.
    40. The portion of the Modified VOW Policy that is NAR's 
revision to its membership policies--much like the Initial VOW 
Policy's anti-referral rule--denies MLS membership and access to 
listings to brokers operating referral services. This membership 
policy effectively forbids Internet-based brokers from referring 
their customers to other brokers for a fee.
    41. NAR's Modified VOW Policy includes other provisions that 
restrict brokers' ability to use the Internet to serve their 
customers effectively. The Modified VOW Policy, for example, allows 
MLSs to downgrade the quality of the data feed they provide brokers, 
effectively restraining brokers from providing innovative, Internet-
based features to enhance the service they offer their customers. 
The Modified VOW Policy also permits MLSs to interfere with 
efficient ``cobranding'' relationships between brokers and entities 
that refer potential customers to the broker.
    42. Defendant's policies, both the Initial VOW Policy and the 
Modified VOW Policy, thus prevent brokers from guaranteeing 
customers access through the Internet to all relevant listing 
information, increase the business risk and other costs associated 
with operating an efficient, Internet-intensive brokerage, deny 
brokers a source of high-quality referrals, and withhold from 
Internet brokers revenue streams permitted to other participants in 
the MLS. Moreover, the opt-out provisions provide brokers an 
effective tool to individually or collectively punish aggressive 
competition by any Internet-based broker.
    43. Unless permanently restrained and enjoined, defendant will 
continue to engage in conduct that restricts competition from 
innovative brokers in violation of section 1 of the Sherman Act, 15 
U.S.C. 1.

Violation Alleged

    44. NAR's adoption of the above-referenced provisions in its 
Initial VOW Policy and its Modified VOW Policy, or equivalent 
provisions, constitutes a contract, combination, or conspiracy by 
and between NAR and its members which unreasonably restrains 
competition in brokerage service markets throughout the United 
States in violation of section 1 of the Sherman Act, 15 U.S.C. 1.
    45. The aforesaid contract, combination, or conspiracy has had 
and will continue to have anticompetitive effects in the relevant 
markets, including:
    a. Suppressing technological innovation;
    b. Reducing competition on price and quality;
    c. Restricting efficient cooperation among brokers;
    d. Making express or tacit collusion more likely; and
    e. Raising barriers to entry.
    46. This contract, combination, or conspiracy is not reasonably 
necessary to accomplish any procompetitive objective, or, 
alternatively, its scope is broader than necessary to accomplish any 
such objective.

Request for Relief

    Wherefore, the United States prays that final judgment be 
entered against defendant declaring, ordering, and adjudging:
    a. That the aforesaid contract, combination, or conspiracy 
unreasonably restrains trade and is illegal under section 1 of the 
Sherman Act, 15 U.S.C. 1;
    b. That the defendant be restrained and enjoined from requiring 
or permitting its member boards or the MLSs with which they are 
affiliated to adopt rules implementing the opt-out provisions;
    c. That the defendant be restrained and enjoined from requiring 
or permitting its member boards or the MLSs with which they are 
affiliated to adopt rules implementing the anti-referral provision 
or an MLS

[[Page 36107]]

membership restriction that denies MLS access to operators of 
Internet-based referral services;
    d. That the defendant be restrained and enjoined from requiring 
or permitting its member boards or the MLSs with which they are 
affiliated to adopt rules that restrict--or condition MLS access or 
MLS participation rights on--the method by which a broker interacts 
with his or her customers, competitor brokers, or other persons or 
entities;
    e. That the Court grant such other relief as the United States 
may request and the Court deems just and proper; and
    f. That the United States recover its costs in this action.

    Dated: October 4, 2005.

J. Bruce Mcdonald,
Deputy Assistant Attorney General.

J. Robert Kramer II,
Director of Operations.

Patrick J. Fitzgerald,
United States Attorney, Northern District of Illinois, by Linda 
Wawzenski, Assistant United States Attorney.

Craig W. Conrath,
David C. Kully,
Mary Beth Mcgee,
Allen P. Grunes,
Lisa A. Scanlon,
Attorneys for the United States, Department of Justice, Antitrust 
Division, 325 Seventh Street, NW., Suite 300, Washington, DC 20530, 
Telephone: (202) 305-9969, Facsimile: (202) 307-9952.

Certificate of Service

    I hereby certify that on this 4th day of October, 2005, I have 
caused a copy of the foregoing Amended Complaint be served by 
Federal Express upon counsel for Defendant in this matter:

Jack R. Bierig, Sidley Austin Brown & Wood, LLP, Bank One Plaza, 10 
South Dearborn Street, Chicago, IL 60603.

Linda Wawzenski.

United States District Court for the Northern District of Illinois 
Eastern Division

United States of America, Plaintiff, v. National Association of 
Realtors[supreg], Defendant.

Civil Action No. 05 C 5140,
Judge Kennelly,
Magistrate Judge Denlow.

[Proposed] Final Judgment

    Whereas, Plaintiff, the United States of America, filed its 
Amended Complaint on October 4, 2005, alleging that Defendant 
National Association of Realtors[supreg] (``NAR'') adopted policies 
that restrain competition from innovative real estate brokers in 
violation of Section 1 of the Sherman Act, 15 U.S.C. 1, and 
Plaintiff and Defendant, by their respective attorneys, have 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact, and without this Final Judgment 
constituting any evidence against, or any admission by, any party 
regarding any issue of fact or law;
    Whereas, Defendant has not admitted and does not admit either 
the allegations set forth in the Amended Complaint or any liability 
or wrongdoing;
    Whereas, the United States does not allege that Defendant's 
Internet Data Exchange (IDX) Policy in its current form violates the 
antitrust laws; and
    Whereas, the United States requires Defendant to agree to 
certain procedures and prohibitions for the purpose of preventing 
the loss of competition alleged in the Complaint;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact, and upon consent of the parties, 
it is Ordered, Adjudged and Decreed:

 I. Jurisdiction

    This Court has jurisdiction over the Parties and subject matter 
of this action. The Complaint states a claim upon which relief may 
be granted against Defendant under section 1 of the Sherman Act, as 
amended (15 U.S.C. 1).

II. Definitions

    As used in this Final Judgment:
    A. ``Broker'' means a Person licensed by a state to provide 
services to a buyer or seller in connection with a real estate 
transaction. The term includes any Person who possesses a Broker's 
license and any agent or sales associate who is affiliated with such 
a Broker.
    B. ``Customer'' means a seller client of a Broker or a Person 
who has expressed to a Broker an interest in purchasing residential 
real property and who has described the type, features, or location 
of the property in which he or she has an interest, entitling the 
Broker to Provide the Customer multiple listing service (``MLS'') 
listing information by any method (e.g., by hand, mail, facsimile, 
electronic mail, or display on a VOW).
    C. ``Final Judgment'' includes the Modified VOW Policy attached 
as Exhibit A and the definition of MLS Participant and accompanying 
Note attached as Exhibit B.
    D. ``ILD Policy'' means the ``ILD (Internet Listing Display) 
Policy'' that NAR adopted on or about August 31, 2005, and any 
amendments thereto.
    E. ``Including'' means including, but not limited to.
    F. ``Listing Information'' means all records of residential 
properties (and any information relating to those properties) stored 
or maintained by a multiple listing service.
    G. ``Member Board'' means any state or local Board of 
Realtors[supreg] or Association of Realtors[supreg], including any 
city, county, inter-county, or inter-state Board or Association, and 
any multiple listing service owned by, or affiliated with, any such 
Board of Realtors[supreg] or Association of Realtors[supreg].
    H. ``Modified VOW Policy'' means the policy attached to this 
Final Judgment as Exhibit A.
    I. ``NAR'' means the National Association of Realtors[supreg], 
its predecessors, successors, divisions, subsidiaries, affiliates, 
partnerships, and joint ventures and all directors, officers, 
employees, agents, and representatives of the foregoing. The terms 
``subsidiary,'' ``affiliate,'' and ``joint venture'' refer to any 
Person in which there is or has been partial (twenty percent or 
more) or total ownership or control between NAR and any other 
Person.
    J. ``Person'' means any natural person, corporation, company, 
partnership, joint venture, firm, association, proprietorship, 
agency, board, authority, commission, office, or other business or 
legal entity, whether private or governmental.
    K. ``Provide'' means to deliver, display, disseminate, convey, 
or reproduce.
    L. ``Rule'' means any rule, model rule, ethical rule, bylaw, 
policy, standard, or guideline and any interpretation of any Rule 
issued or approved by NAR, whether or not the final implementation 
date of any such Rule has passed.
    M. ``VOW'' or ``virtual office Web site'' means a Web site, or 
feature of a Web site, operated by a Broker or for a Broker by 
another Person through which the Broker is capable of providing real 
estate brokerage services to consumers with whom the Broker has 
first established a Broker-consumer relationship (as defined by 
state law) where the consumer has the opportunity to search MLS 
data, subject to the Broker's oversight, supervision, and 
accountability.
    N. ``VOW Policy'' means the ``Policy governing use of MLS data 
in connection with Internet brokerage services offered by MLS 
Participants (`Virtual Office Web sites'),'' adopted by NAR on or 
about May 17, 2003, and any amendments thereto.
    O. The terms ``and'' and ``or'' have both conjunctive and 
disjunctive meanings.

III. Applicability

    This Final Judgment applies to NAR and all other Persons in 
active concert or participation with NAR who have received actual 
notice of this Final Judgment. A Member Board shall not be deemed to 
be in active concert with NAR solely as a consequence of the Member 
Board's receipt of actual notice of this Final Judgment and its 
affiliation with or membership in NAR and its involvement in regular 
activities associated with its affiliation with or membership in NAR 
(e.g., coverage under a NAR insurance policy, attendance at NAR 
meetings or conventions, or review of Member Board policies by NAR).

IV. Prohibited Conduct

    Subject to the provisions of sections V and VI of this Final 
Judgment, the Modified VOW Policy (Exhibit A), and the definition of 
MLS Participant and accompanying Note (Exhibit B), NAR shall not 
adopt, maintain, or enforce any Rule, or enter into or enforce any 
agreement or practice, that directly or indirectly
    A. Prohibits a Broker from using a VOW or prohibits, restricts, 
or impedes a Broker who uses a VOW from providing to Customers on 
its VOW all of the Listing Information that a Broker is permitted to 
Provide to Customers by hand, mail, facsimile, electronic mail, or 
any other methods of delivery;
    B. Unreasonably disadvantages or unreasonably discriminates 
against a Broker in the use of a VOW to Provide to Customers all of 
the Listing Information that a Broker is permitted to Provide to 
Customers by hand, mail, facsimile, electronic mail, or any other 
methods of delivery;

[[Page 36108]]

    C. Prohibits, restricts, or impedes the referral of Customers 
whose identities are obtained from a VOW by a Broker who uses a VOW 
to any other Person, or establishes the price of any such referral;
    D. Imposes fees or costs upon any Broker who operates a VOW or 
upon any Person who operates a VOW for any Broker that exceed the 
reasonably estimated actual costs incurred by a Member Board in 
providing Listing Information to the Broker or Person operating the 
VOW or in performing any other activities relating to the VOW, or 
discriminates in such VOW related fees or costs between those 
imposed upon a Broker who operates a VOW and those imposed upon a 
Person who operates a VOW for a Broker, unless the MLS incurs 
greater costs in providing a service to a Person who operates a VOW 
for a Broker than it incurs in providing the same service to the 
Broker; or
    E. Is inconsistent with the Modified VOW Policy.

V. Required Conduct

    A. Within five business days after entry of this Final Judgment, 
NAR shall repeal the ILD Policy and direct each Member Board that 
adopted Rules implementing the ILD Policy to repeal such Rules at 
the next meeting of the Member Board's decisionmaking body that 
occurs more than ten days after receipt of the directive, but no 
later than ninety days after entry of this Final Judgment.
    B. Within five business days after entry of this Final Judgment, 
NAR shall direct Member Boards that adopted Rules implementing the 
VOW Policy to repeal such Rules at the next meeting of the Member 
Board's decisionmaking body that occurs more than ten days after 
receipt of the directive, but no later than ninety days after entry 
of this Final Judgment.
    C. Within five business days after entry of this Final Judgment, 
NAR shall adopt the Modified VOW Policy. NAR shall not change the 
Modified VOW Policy without either obtaining advance written 
approval by the United Slates Department of Justice, Antitrust 
Division (``DOJ'') or an order of the Court pursuant to Section VIII 
of this Final Judgment authorizing the proposed modification.
    D. Within five business days after entry of this Final Judgment, 
NAR shall direct Member Boards to adopt the Modified VOW Policy 
within ninety days after entry of this Final Judgment, and to 
thereafter maintain, act consistently with, and enforce Rules 
implementing the modified VOW Policy. NAR shall simultaneously 
direct Member Boards, beginning upon receipt of the directive, not 
to adopt, maintain, or enforce any Rule or practice that NAR would 
be prohibited from adopting, maintaining, or enforcing pursuant to 
Section IV of this Final Judgment (including Rules or practices that 
unreasonably discriminate against Brokers in their operation of 
VOWs).
    E. If NAR determines that a Member Board has not timely adopted 
or maintained, acted consistently with, or enforced Rules 
implementing the Modified VOW Policy, it shall, within thirty days 
of such determination, direct in writing that the Member Board do 
so. NAR shall deny coverage under any NAR insurance policy (or cause 
coverage to be denied) to any Member Board for as long as that 
Member Board refuses to adopt, maintain, act consistently with, and 
enforce rules implementing the Modified VOW Policy. NAR shall also 
notify the DOJ of the identity of that Member Board and the Modified 
VOW Policy provisions it refused to adopt, maintain, act 
consistently with, or enforce. For purposes of this provision, a 
failure of a Member Board to adopt, maintain, act consistently with, 
or enforce Rules implementing the Modified VOW Policy within ninety 
days of a written directive to that Member Board from NAR shall 
constitute a refusal by the Member Board to do so.
    F. If NAR determines that a Member Board has adopted, 
maintained, or enforced any Rule or practice that NAR would be 
prohibited from adopting, maintaining, or enforcing pursuant to 
Section IV of this Final Judgment (including Rules or practices that 
unreasonably discriminate against Brokers in their operation of 
VOWs), it shall, within thirty days of such determination, direct in 
writing that the Member Board rescind and cease to enforce that Rule 
or practice. NAR shall deny coverage under any NAR insurance policy 
(or cause coverage to be denied) to any Member Board for as long as 
that Member Board refuses to rescind and cease to enforce that Rule 
or practice. NAR shall also notify the DOJ of the identity of that 
Member Board and the Rule or practice it refused to rescind and 
cease to enforce. For purposes of this provision, a Member hoard's 
failure to rescind and cease to enforce the Rule or practice within 
ninety days of a written directive from NAR shall constitute a 
refusal by the Member board to do so.
    G. Within thirty days of entry of this Final Judgment, NAR shall 
designate an Antitrust Compliance Officer with responsibility for 
educating Member Boards about the antitrust laws and for achieving 
full compliance with this Final Judgment. The Antitrust Compliance 
Officer shall be responsible for the following:
    (1) Supervising NAR's review of Rules of NAR's Member Boards for 
compliance with this Final Judgment and the Modified VOW Policy;
    (2) Maintaining copies of any communications with any Person 
containing allegations of any Member Board's (i) noncompliance with 
any provision of the Modified VOW Policy or with this Final Judgment 
or (ii) failure to enforce any Rules implementing the Modified VOW 
Policy;
    (3) Reporting to the United States 180 days after entry of this 
Final Judgment and again on the first anniversary of the entry of 
this Final Judgment, the identity of each Member Board that has not 
adopted Rules implementing the Modified VOW Policy;
    (4) Ensuring that each of NAR's Member Boards that owns or 
operates a multiple listing service are provided briefing materials, 
within ninety days of the entry of this Final Judgment, on the 
meaning and requirements of the Modified VOW Policy and this Final 
Judgment; and
    (5) Holding an annual program for NAR Member Boards and their 
counsel that includes a discussion of the antitrust laws (as applied 
to such Member Boards) and this Final Judgment.
    H. NAR shall maintain and shall furnish to the DOJ on a 
quarterly basis (beginning ninety days after entry of this Final 
Judgment) copies of any communications with any Person containing 
allegations of any Member's Board's (1) noncompliance with any 
provision of the Modified VOW Policy or with this Final Judgment or 
(2) failure to enforce any Rules implementing the Modified VOW 
Policy.
    I. Within five business days after entry of this Final Judgment, 
NAR shall provide, in a prominent size and location on its Web site 
(https://www.realtor.org) a hyperlink to a Web page on which NAR has 
published copies of
    (1) This Final Judgment;
    (2) A notification that Member Boards must repeal any Rules 
implementing the ILD and VOW Policies (in accordance with Sections 
V.A and V.B of this Final Judgment); and
    (3) A copy of the Modified VOW Policy.
    NAR shall also publish each of the three above items in the 
first issue of Realtor[supreg] Magazine scheduled for publication 
after the date of entry of this Final Judgment.

 VI. Permitted Conduct

    A. Subject to section IX of this Final Judgment, nothing in this 
Final Judgment shall prohibit NAR from adopting and maintaining the 
definition of MLS Participant and the accompanying Note, together 
attached as Exhibit B. However, NAR shall direct each Member Board 
not to suspend or expel any Broker from multiple listing service 
membership or participation for reasons of the Broker's then-failure 
to qualify for membership or participation under the definition of 
MLS Participant and the accompanying Note, together attached as 
Exhibit B, until May 27, 2009.
    B. Notwithstanding any of the above provisions, and subject to 
section IX of this Final Judgment, nothing in this Final Judgment 
shall prohibit NAR from adopting, maintaining, or enforcing Rules 
that are generally applicable on their face and that do not, in 
their application, unreasonably restrict any method of delivery of 
Listing Information to Customers.

VII. Compliance Inspection

    A. For the purposes of determining or securing compliance with 
this Final Judgment, or of determining whether this Final Judgment 
should be modified or vacated, and subject to any legally recognized 
privilege, from time to time authorized representatives of the DOJ, 
including consultants and other Persons retained by the United 
States, shall, upon written request of an authorized representative 
of the Assistant Attorney General in charge of the Antitrust 
Division, and on reasonable notice to NAR, be permitted:
    (1) Access during NAR's office hours to inspect and copy, or at 
the option of the United States, to require NAR to provide hard copy 
or electronic copies of, all books, ledgers, accounts, records, 
data, and documents in the possession, custody, or control of NAR, 
relating to any matters contained in this Final Judgment; and

[[Page 36109]]

    (2) To interview, either informally or on the record, NAR's 
officers, employees, or agents, who may have their individual 
counsel and counsel for NAR present, regarding such matters. The 
interviews shall be subject to the reasonable convenience of the 
interviewee and without restraint or interference by NAR. NAR may, 
however, prevent the interviewee from divulging matters protected by 
the attorney-client privilege, work product doctrine, or other 
applicable privilege.
    B. Upon the written request of an authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
NAR shall submit written reports or response to written 
interrogatories, under oath if requested, relating to its compliance 
with any of the matters contained in this Final Judgment as may be 
requested.
    C. No information or documents obtained by the means provided in 
this section shall be divulged by the United States to any Person 
other than an authorized representative of the executive branch of 
the United States, except in the course of legal proceedings to 
which the United States is a party (including grand jury 
proceedings), or for the purpose of securing compliance with this 
Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by NAR 
to the United States, NAR marks as confidential any pertinent page 
of such material on the grounds that such page contains information 
as to which a claim of protection may be asserted under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure, then the United 
States shall give NAR ten calendar days notice prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding).

VIII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this 
Final Judgment to apply to this Court at any time for further orders 
and directions as may be necessary or appropriate to carry out or 
construe this Final Judgment, to modify any of its provisions, to 
enforce compliance, and to punish violations of its provisions.

IX. No Limitation on Government Rights

    Nothing in this Final Judgment shall limit the right of the 
United States to investigate and bring actions to prevent or 
restrain violations of the antitrust laws concerning any Rule or 
practice adopted or enforced by NAR or any of its Member Boards.

X. Expiration of Final Judgment

    This Final Judgment shall expire ten years from the date of its 
entry.

XI. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The 
parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, including making copies 
available to the public of this Final Judgment, the Competitive 
Impact Statement, and any comments thereon and the United States's 
responses to comments. Based upon the record before the Court, which 
includes the Competitive Impact Statement and any comments and 
response to comments filed with the Court, entry of this Final 
Judgment is in the public interest.

Dated: Court approval subject to procedures of Antitrust Procedures 
and Penalties Act, 15 U.S.C. 16.

Matthew F. Kennelly,

United States District Judge.

Exhibit A

Policy Governing Use of MLS Data in Connection With Internet Brokerage 
Services Offered by MLS Participants (``Virtual Office Web sites'')

I. Definitions and Scope of Policy

    1. For purposes of this Policy, the term Virtual Office Website 
(``VOW'') refers to a Participant's Internet Web site, or a feature 
of a Participant's Internet Web site, through which the Participant 
is capable of providing real estate brokerage services to consumers 
with whom the Participant has first established a broker-consumer 
relationship (as defined by state law) where the consumer has the 
opportunity to search MLS data, subject to the Participant's 
oversight, supervision, and accountability.
    a. A Participant may designate an Affiliated VOW Partner 
(``AVP'') to operate a VOW on behalf of the Participant, subject to 
the Participant's supervision and accountability and the terms of 
this Policy.
    b. A non-principal broker or sales licensee, affiliated with a 
Participant, may, with the Participant's consent, operate a VOW or 
have a VOW operated on its behalf by an AVP. Such a VOW is subject 
to the Participant's supervision and accountability and the terms of 
this Policy.
    c. Each use of the term ``Participant'' in this Policy shall 
also include a Participant's non-principal brokers and sales 
licensees (with the exception of references in this section to the 
``Participant's consent'' and the ``Participant's supervision and 
accountability,'' and in section III.10.a, below, to the 
``Participant acknowledges''). Each reference to ``VOW'' or ``VOWs'' 
herein refers to all VOWs, whether operated by a Participant, by a 
non-principal broker or sales licensee, or by an AVP.
    2. The right to display listings in response to consumer 
searches is limited to display of MLS data supplied by the MLS(s) in 
which the Participant has participatory rights. This does not 
preclude a firm with offices participating in different MLSs from 
operating a master Web site with links to such offices' VOWs.
    3. Participants' Internet Web sites, including those operated 
for Participants by AVPs, may also provide other features, 
information, or services in addition to VOWs (including the Internet 
Data Exchange (``IDX'') function).
    4. The display of listing information on a VOW does not require 
separate permission from the Participant whose listings will be 
available on the VOW.
    5. Except as permitted in sections III and IV, MLSs may not 
adopt rules or regulations that conflict with this Policy or that 
otherwise restrict the operation of VOWs by Participants.

II. Policies Applicable to Participants' VOWs

    1. A Participant may provide brokerage services via a VOW that 
include making MLS active listing data available, but only to 
consumers with whom the Participant has first established a lawful 
consumer-broker relationship, including completion of all actions 
required by state law in connection with providing real estate 
brokerage services to clients and customers (hereinafter 
``Registrants''). Such actions shall include, but are not limited 
to, satisfying all applicable agency, non-agency, and other 
disclosure obligations, and execution of any required agreement(s).
    2. A Participant's VOW must obtain the identity of each 
Registrant and obtain each Registrant's agreement to Terms of Use of 
the VOW, as follows:
    a. A Registrant must provide his or her name and a valid e-mail 
address. The Participant must send an e-mail to the address provided 
by the Registrant confirming that the Registrant has agreed to the 
Terms of Use (described in subsection c below). The Registrant may 
be permitted to access the VOW only after the Participant has 
verified that the e-mail address provided is valid and that 
Registrant received the Terms of Use confirmation.
    b. The Registrant must supply a user name and a password, the 
combination of which must be different from those of all other 
Registrants on the VOW, before being permitted to search and 
retrieve information from the MLS database via the VOW. The user 
name and password may be established by the Registrant or may be 
supplied by the Participant, at the option of the Participant. An e-
mail address may be associated with only one user name and password. 
The Registrant's password and access must expire on a date certain 
but may be renewed. The Participant must at all times maintain a 
record of the name and e-mail address supplied by the Registrant, 
and the user name and current password of each Registrant. Such 
records must be kept for not less than 180 days after the expiration 
of the validity of the Registrant's password. If the MLS has reason 
to believe that a Participant's VOW has caused or permitted a breach 
in the security of the data or a violation of MLS rules related to 
use by one or more Registrants, the Participant shall, upon request, 
provide to the MLS a copy of the record of the name, e-mail address, 
user name, current password, and audit trail, if required, of any 
Registrant identified by the MLS to be suspected of involvement in 
the violation.
    c. The Registrant must be required affirmatively to express 
agreement to a ``Terms of Use'' provision that requires the 
Registrant to open and review an agreement that provides at least 
the following:
    i. That the Registrant acknowledges entering into a lawful 
consumer-broker relationship with the Participant;
    ii. That all data obtained from the VOW is intended only for the 
Registrant's personal, non-commercial use;
    iii. That the Registrant has a bona fide interest in the 
purchase, sale, or lease of real estate of the type being offered 
through the VOW;

[[Page 36110]]

    iv. That the Registrant will not copy, redistribute, or 
retransmit any of the data or information provided;
    v. That the Registrant acknowledges the MLS's ownership of, and 
the validity of the MLS's copyright in, the MLS database.
    After the Registrant has opened for viewing the Terms of Use 
agreement, a ``mouse click'' is sufficient to acknowledge agreement 
to those terms. The Terms of Use Agreement may not impose a 
financial obligation on the Registrant or create any representation 
agreement between the Registrant and the Participant.
    The Terms of Use agreement shall also expressly authorize the 
MLS, and other MLS Participants or their duly authorized 
representatives, to access the VOW for the purposes of verifying 
compliance with MLS rules and monitoring display of Participants' 
listings by the VOW.
    d. An agreement entered into at any time between the Participant 
and Registrant imposing a financial obligation on the Registrant or 
creating representation of the Registrant by the Participant must be 
established separately from the Terms of Use, must be prominently 
labeled as such, and may not be accepted solely by mouse click.
    3. A Participant's VOW must prominently display an e-mail 
address, telephone number, or specific identification of another 
mode of communication (e.g., live chat) by which a consumer can 
contact the Participant to ask questions, or get more information, 
about properties displayed on the VOW. The Participant, or a non-
principal broker or sales licensee licensed with the Participant, 
must be willing and able to respond knowledgeably to inquiries from 
Registrants about properties within the market area served by that 
Participant and displayed on the VOW.
    4. A Participant's VOW must protect the MLS data from 
misappropriation by employing reasonable efforts to monitor for and 
prevent ``scraping'' or other unauthorized accessing, reproduction, 
or use of the MLS database.
    5. A Participant's VOW must comply with the following additional 
requirements:
    a. No VOW shall display listings or property addresses of 
sellers who have affirmatively directed their listing brokers to 
withhold their listing or property address from display on the 
Internet. The listing broker or agent shall communicate to the MLS 
that a seller has elected not to permit display of the listing or 
property address on the Internet. Notwithstanding the foregoing, a 
Participant who operates a VOW may provide to consumers via other 
delivery mechanisms, such as e-mail, fax, or otherwise, the listings 
of sellers who have determined not to have the listing for their 
property displayed on the Internet.
    b. A Participant who lists a property for a seller who has 
elected not to have the property listing or the property address 
displayed on the Internet shall cause the seller to execute a 
document that conforms to the form attached to this Policy as 
Appendix A. The Participant shall retain such forms for at least one 
year from the date they are signed.
    c. With respect to any VOW that
    (i) Allows third-parties to write comments or reviews about 
particular listings or displays a hyperlink to such comments or 
reviews in immediate conjunction with particular listings, or
    (ii) Displays an automated estimate of the market value of the 
listing (or hyperlink to such estimate) in immediate conjunction 
with the listing, the VOW shall disable or discontinue either or 
both of those features as to the seller's listing at the request of 
the seller. The listing broker or agent shall communicate to the MLS 
that the seller has elected to have one or both of these features 
disabled or discontinued on all Participants' Web sites. Except for 
the foregoing and subject to subparagraph (d), a Participant's VOW 
may communicate the Participant's professional judgment concerning 
any listing. Nothing shall prevent a VOW from notifying its 
customers that a particular feature has been disabled ``at the 
request of the seller.''
    d. A VOW shall maintain a means (e.g., e-mail address, telephone 
number) to receive comments about the accuracy of any data or 
information that is added by or on behalf of the VOW operator beyond 
that supplied by the MLS and that relates to a specific property 
displayed on the VOW. The VOW operator shall correct or remove any 
false data or information relating to a specific property upon 
receipt of a communication from the listing broker or listing agent 
for that property explaining why the data or information is false. 
However, the VOW operator shall not be obligated to remove or 
correct any data or information that simply reflects good faith 
opinion, advice, or professional judgment.
    e. Each VOW shall refresh MLS data available on the VOW not less 
frequently than every 3 days.
    f. Except as provided elsewhere in this Policy or in MLS rules 
and regulations, no portion of the MLS database may he distributed, 
provided, or made accessible to any person or entity.
    g. Every VOW must display a privacy Policy that informs 
Registrants of the ways in which information obtained from them will 
be used.
    h. A VOW may exclude listings from display based only on 
objective criteria, including, but not limited to, factors such as 
geography, list price, type of property, cooperative compensation 
offered by listing broker, or whether the listing broker is a 
Realtor[supreg].
    6. A Participant who intends to operate a VOW must notify the 
MLS of its intention to establish a VOW and must make the VOW 
readily accessible to the MLS and to all MLS Participants for 
purposes of verifying compliance with this Policy and any other 
applicable MLS rules or policies.
    7. A Participant may operate more than one VOW itself or through 
an AVP. A Participant who operates a VOW itself shall not be 
precluded from also operating VOWs in conjunction with AVPs.

III. Policies Applicable to Multiple Listing Services

    1. A Multiple Listing Service shall permit MLS Participants to 
operate VOWs, or to have VOWs operated for them by AVPs, subject to 
the requirements of state law and this Policy.
    2. An MLS shall, if requested by a Participant, provide basic 
``downloading'' of all MLS non-confidential listing data, including 
without limitation address fields, listings types, photographs, and 
links to virtual tours. Confidential data includes only that which 
Participants are prohibited from providing to customers orally and 
by all other delivery mechanisms. They include fields containing the 
information described in paragraph IV(1) of this Policy, provided 
that sold data (i.e., listing information relating to properties 
that have sold) shall be deemed confidential and withheld from a 
download only if the actual sales prices of completed transactions 
are not accessible from public records. For purposes of this Policy, 
``downloading'' means electronic transmission of data from MLS 
servers to a Participant's or AVP's server on a persistent basis. An 
MLS may also offer a transient download. In such case, it shall 
also, if requested, provide a persistent download, provided that it 
may impose on users of such download the approximate additional 
costs incurred by it to do so.
    3. This Policy does not require an MLS to establish publicly 
accessible sites displaying Participants' listings.
    4. If an MLS provides a VOW-specific feed, that feed must 
include all of the non-confidential data included in the feed 
described in paragraph 2 above except for listings or property 
addresses of sellers who have elected not to have their listings or 
addresses displayed on the Internet.
    5. An MLS may pass on to those Participants who will download 
listing information the reasonably estimated costs incurred by the 
MLS in adding or enhancing its ``downloading'' capacity to enable 
such Participants to operate VOWs.
    6. An MLS may require that Participants (1) utilize appropriate 
security protection, such as firewalls, as long as such requirement 
does not impose security obligations greater than those employed 
concurrently by the MLS, and/or (2) maintain an audit trail of 
Registrants' activity on the VOW and make that information available 
to the MLS if the MLS has reason to believe that any VOW has caused 
or permitted a breach in the security of the data or a violation of 
applicable MLS rules.
    7. An MLS may not prohibit or regulate display of advertising or 
the identification of entities on VOWs (``branding'' or ``co-
branding''), except to prohibit deceptive or misleading advertising 
or co-branding. For purposes of this provision, co-branding will be 
presumed not to be deceptive or misleading if the Participant's logo 
and contact information (or that of at least one Participant, in the 
case of a VOW established and operated by or for more than one 
Participant) is displayed in immediate conjunction with that of 
every other party, and the logo and contact information of all 
Participants displayed on the VOW is as large as the logo of the AVP 
and larger than that of any third party.
    8. Except as provided in this Policy, an MLS may not prohibit 
Participants from enhancing their VOWs by providing

[[Page 36111]]

information obtained from sources other than the MLS, additional 
technological services (such as mapping functionality), or 
information derived from non-confidential MLS data (such as an 
estimated monthly payment derived from the listed price), or 
regulate the use or display of such information or technological 
services on any VOW.
    9. Except as provided in generally applicable rules or policies 
(such as the Realtor[supreg] Code of Ethics), an MLS may not 
restrict the format of data display on a VOW or regulate the 
appearance of VOWs.
    10. Subject to the provisions below, an MLS shall make MLS 
listing data available to an AVP for the exclusive purpose of 
operating a VOW on behalf of a Participant. An MLS shall make MLS 
listing data available to an AVP under the same terms and conditions 
as those applicable to Participants. No AVP has independent 
participation rights in the MLS by virtue of its right to receive 
data on behalf of a Participant, or the right to use MLS data except 
in connection with operation of a VOW for a Participant. AVP access 
to MLS data is derivative of the rights of the Participant on whose 
behalf the AVP is downloading data.
    a. A Participant, non-principal broker or sales licensee, or AVP 
may establish the AVP's right to receive and use MLS data by 
providing to the MLS a writing in which the Participant acknowledges 
its or its non-principal broker's or sales licensee's selection of 
the AVP to operate a VOW on its behalf.
    b. An MLS may not charge an AVP, or a Participant on whose 
behalf an AVP operates a VOW, more than a Participant that chooses 
to operate a VOW itself (including any fees or costs associated with 
a license to receive MLS data, as described in (g), below), except 
to the extent that the MLS incurs greater costs in providing listing 
data to the AVP than the MLS incurs in providing listing data to a 
Participant.
    c. An MLS may not place data security requirements or 
restrictions on use of MLS listing data by an AVP that are not also 
imposed on Participants.
    d. An MLS must permit an AVP to download listing information in 
the same manner (e.g., via a RETS feed or via an FTP download), at 
the same times and with the same frequency that the MLS permits 
Participants to download listing information.
    e. An MLS may not refuse to deal directly with an AVP in order 
to resolve technical problems with the data feed. However, the MLS 
may require that the Participant on whose behalf the AVP is 
operating the VOW participate in such communications if the MLS 
reasonably believes that the involvement of the Participant would be 
helpful in order to resolve the problem.
    f. An MLS may not condition an AVP's access to a data feed on 
the financial terms on which the AVP provides the site for the 
Participant.
    g. An MLS may require Participants and AVPs to execute license 
or similar agreements sufficient to ensure that Participants and 
AVPs understand and agree that data provided by the MLS may be used 
only to establish and operate a VOW on behalf of the Participant and 
not for any other purpose.
    h. An MLS my not (i) prohibit an AVP from operating VOWs on 
behalf of more than One Participant, and several Participants may 
designate an AVP to operate a single VOW for them collectively, (ii) 
limit the number of entities that Participan