Warren Raises Antitrust Concerns Over Private Home Listings

Warren, the ranking Democrat on the Senate Banking, Housing and Urban Affairs Committee, sent a letter to Compass Chief Executive Officer Robert Reffkin and MRED CEO Rebecca Jensen seeking information about the arrangement and the companies’ assessment of its potential antitrust and fair-housing implications, according to Atlanta Agent Magazine.

The inquiry adds another layer of regulatory pressure on private listing networks, which allow properties to be marketed to a more limited audience rather than immediately entering the broader pool of listings typically available through multiple listing services and consumer-facing real estate websites.

According to Atlanta Agent Magazine, Warren warned that the Compass-MRED arrangement could result in a housing market in which buyers and industry participants with access to private inventory have advantages over those relying on publicly available listings. She also said greater use of such networks could increase consolidation in the real estate industry and ultimately raise costs for consumers.

The senator’s concerns extend beyond traditional competition policy. Warren said the limited visibility of private listings could increase the risk of discriminatory housing practices, including steering, while making potential violations more difficult to identify, Atlanta Agent Magazine reported.

Warren is asking Reffkin and Jensen to provide details about the partnership and explain how the companies evaluated potential antitrust and fair-housing risks before proceeding, according to the publication.

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Another concern centers on market data. Private listings can make information commonly used by buyers, sellers and agents — including a property’s time on the market and previous price changes — less readily available. Warren argued that withholding such information could impair price negotiations and have consequences extending beyond individual transactions, according to Atlanta Agent Magazine.

The Compass-MRED arrangement dates to April, when the companies announced a partnership aimed at expanding the use of private listing networks through MRED’s multiple listing service, according to Warren’s letter. The senator characterized the arrangement as potentially creating separate levels of access to housing inventory and data.

The Senate inquiry follows scrutiny in the House. The House Judiciary Committee’s Subcommittee on the Administrative State, Regulatory Reform and Antitrust began examining the relationship between Compass and MRED and the potential effect of their private-listing strategy on consumers, Atlanta Agent Magazine reported. The subcommittee sought briefings from Reffkin and Jensen after sending letters to the executives on July 22.

Consumer and civil-rights organizations have also pressed federal antitrust regulators to intervene. In July, a coalition led by the Consumer Federation of America urged the Justice Department and Federal Trade Commission to investigate Compass’s agreements with multiple listing services, arguing that the arrangements could reduce transparency, strengthen the position of dominant industry participants and restrict equal access to housing opportunities, according to Atlanta Agent Magazine.

The scrutiny places private listings at the intersection of two regulatory issues facing the residential real estate industry: whether control over listing information can distort competition and whether limiting the distribution of that information can produce unequal outcomes for consumers.

Source: Atlanta Agent Magazine