“Compass wants to have its cake and eat it too.”
Six MLSs put those words in a federal lawsuit they filed against the brokerage on October 21, to prevent Compass International Holdings (CIH) from filing antitrust lawsuits against them.
The move comes less than a week after Compass sued CRMLS over private listing fines.
Here’s what’s in the complaint and what to watch for next.
What the Six MLSs Are Asking the Court to Do
Six MLSs have teamed up to sue Compass in the U.S. District Court for the Southern District of New York:
- Arizona Regional MLS (ARMLS)
- Bridge MLS
- Canopy MLS
- Doorify MLS
- Hive MLS
- REcolorado
The case follows the one California Regional MLS (CRMLS) filed against Compass in the same court in early October. Both suits ask for the same outcome.
The fight centers on cooperation rules that say once a broker starts marketing a listing to the public, the listing has to go into the MLS.
The six MLSs want two things from the court:
- A declaratory judgment, which is a ruling that their cooperation rules don’t break federal or state antitrust laws
- A permanent injunction barring Compass from “bringing or pursuing any claim against any MLS Party alleging that the Cooperation Rules violate the federal antitrust laws or the state antitrust laws”
Here’s how the complaint describes the request:
“Faced with this imminent threat, the MLS Parties file this action seeking a declaratory judgment that their respective Cooperation Rules do not violate Section 1 of the Sherman Act, 15 U.S.C. § 1, or the state antitrust laws of Arizona, California, Colorado, and North Carolina, because the Cooperation Rules are not anticompetitive and have significant procompetitive benefits.”
The MLSs say they filed in response to demand letters Compass sent to MLSs around the country in early September, threatening to sue any MLS that keeps fining or penalizing Compass agents for marketing office exclusives to the public.
How Each Side Frames the Competition Question
Each side says it’s the one looking out for competition and consumers.
According to the complaint, cooperation rules keep more homes from being hidden from the market.
The complaint states:
“By requiring that publicly marketed listings be promptly submitted to the MLS, the Cooperation Rules reduce hidden inventory and improve the completeness, accuracy and timeliness of information to provide an efficient market for all participants and consumers. This transparency benefits both buyers, who gain access to a more complete picture of available properties, and sellers, who benefit from the most efficient pricing.”
The complaint alleges Compass “wants to unilaterally decide what information it puts into the MLS and when it puts that information into the MLS, thereby limiting the information available to brokers and the consumers they represent.”
In other words, Compass wants to “have its cake and eat it, too.”
On the defendant side, Compass has argued in public statements and in court that MLSs are anticompetitive. In its view, MLSs are run by boards of competing brokers who write the rules for how other brokerages, Compass included, run their businesses.
What to Watch in Your Market
Seven MLSs have sued Compass at this point: CRMLS plus the six that filed on October 21.
Two others, Unlock MLS and OneKey MLS, have rejected Compass’s demands in public without going to court.
With cases from both sides in front of federal judges, it’s even more important to know your own MLS’s cooperation rules and private listing options, so you have an answer ready when a seller asks how their home can be marketed.
Stay tuned for the next development.
