United States v. National Association of Realtors; Proposed Final Judgment and Competitive Impact Statement, 47613-47632 [E8-17800]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 73, Number 158 (Thursday, August 14, 2008)]
[Notices]
[Pages 47613-47632]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17800]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. National Association of Realtors; 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 websites'' 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 arid 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 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. Please note that this notice 
supercedes 73 FR 36104, the June 25, 2008, publication of the proposed 
Final Judgment and Competitive Impact Statement in United States of 
America v. National Association of Realtors[supreg]. That publication 
contained a typesetting error in the ``Statement of MLS Policy'' that 
is Exhibit B to the proposed Final Judgment (73 FR at 36112). A 
corrected version of Exhibit B to the proposed Final Judgment is 
included with this notice.

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

[[Page 47614]]

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 websites 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 websites 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 
websites--sites that defendant referred to as ``virtual office 
websites,'' 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 websites 
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 rules 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['] 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 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. 139 1(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

[[Page 47615]]

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 believe 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 1920s, 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 Websites
    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 websites came to be known as virtual 
office websites 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 
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 Websites').'' 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

[[Page 47616]]

and received NAR's approval of their implementing rules.
    32. Section I.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 websites to provide listings to their customers 
in the future. In at least one such instance, an innovative broker 
discontinued operation of his website 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.1.b of the Initial VOW Policy, NAR's member boards may forbid VOW 
operators from displaying advertising on any website 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 I.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.

[[Page 47617]]

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 
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.

/s/--------------------------------------------------------------------

J. Bruce McDonald,

Deputy Assistant Attorney General.

/s/--------------------------------------------------------------------

J. Robert Kramer II,

Director of Operations.

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Patrick J. Fitzgerald,

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

/s/--------------------------------------------------------------------

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.

/s/--------------------------------------------------------------------

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,

[[Page 47618]]

whether or not the final implementation date of any such Rule has 
passed.
    M. ``VOW'' or ``virtual office website'' means a website, or 
feature of a website, 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 Websites'),'' 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 MAR).

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;
    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 tees 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 States 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 Board'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

[[Page 47619]]

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 
(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[reg] 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
    (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 he 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


[[Page 47620]]


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 Websites'')

I. Definitions and Scope of Policy

    1. For purposes of this Policy, the term Virtual Office Website 
(``VOW'') refers to a Participant's Internet website, or a feature of a 
Participant's Internet website, 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.l0.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 
website with links to such offices' VOWs.
    3. Participants' Internet websites, 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 email 
address. The Participant must send an email 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 email 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 email 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 
email address supplied by the Registrant, and the username 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 Participants'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, email 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;
    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-

[[Page 47621]]

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 
email, 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' websites. 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 be 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 nonconfidential 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 nonconfidential 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

[[Page 47622]]

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 information 
obtained from sources other than the MLS, additional technological 
services (such as mapping functionality), or information derived from 
nonconfidential 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 reasonabl