Sep 21, 2021, 12:55 ET
AUSTIN, Texas, Sept. 21, 2021 /PRNewswire/ -- NBC News' new innovative primetime program, Top Story with Tom Llamas, debuted nationally on Monday, September 20th with an investigative look at the red-hot housing market and why the anticompetitive practices of the National Association of Realtors (NAR) and Zillow cost home buyers and sellers tens of thousands of dollars.
The key segment highlighted REX, the only pro-consumer real estate industry player challenging Zillow's segregated display in federal court. Throughout the segment, the Top Story with Tom Llamas ran the banner, "Zillow accused of undermining sellers who self-list."
NBC News national correspondent Vicky Nguyen investigated home buying in Dallas, TX, and the NAR's segregation rule which Zillow agreed to apply to its websites in January. Zillow's segregated display puts homes sold by legacy brokers into its main feed and cordons off homes sold by innovative brokers like REX into a "hidden" tab. This hurts consumers because the legacy homes on Zillow's main tab have commissions ranging from 5 to 6 percent while homes buried in the hidden tab have much lower commissions.
"Consumers are not seeing these homes. American home buyers deserve better. American home sellers deserve more choice," said Rex General Counsel Michael Toth during the piece.
"I'm not surprised that a little tweak has had such a big impact," said Benjamin Keys, Professor of Real Estate at the Wharton School of Business at the University of Pennsylvania.
Zillow's response to the NBC inquiry pointed the finger at NAR and "outdated rules required Zillow to change the way listings appear."
NAR pointed the finger back at Zillow saying, "how Zillow displays listings is between Zillow and each Multiple Listing Service."
NAR further misrepresented the facts during the NBC Now interview saying "the court says Rex is not likely to prevail in its lawsuit" despite that on September 2, U.S. District Judge Thomas Zilly greenlit REX's lawsuit and in August the U.S. Department of Justice filed a motion to correct previous misrepresentations of facts by the National Association of Realtors.
Last week, the National Association of Realtors ran a public relations campaign misleading the media about a "lawsuit" against the U.S. Department of Justice. Despite national headlines, the NAR filing was not a lawsuit but a motion to evade a federal investigation into nearly two-dozen inquiries into anti-competitive practices, including the segregation rule and potential illegal antitrust activities.
Michael Toth, Rex General Counsel responded to the Zillow and NAR commentary stating, "This case is becoming must watch tv for real estate consumers and legal scholars. Consumers and the law are clearly on Rex's side. That's why NAR and Zillow are pointing fingers at each other and why NAR has to engage in misinformation campaigns to hide its outdated ways. Today, NAR is not only fighting an anti-trust challenge from REX but is also staring down the barrel of an unprecedented federal investigation into its business practices."
Timeline: Rex v. Zillow
- On March 9, REX, the pro-consumer digital platform and full-service real estate brokerage, filed a federal antitrust complaint against Zillow, Trulia, and the National Association of Realtors (NAR).
- On August 10, U.S. Department of Justice files brief in the REX/Zillow-NAR Segregation Rule case "to prevent the drawing of unwarranted inferences from a now-expired 2008 consent decree" and to stop the National Association of Realtors from using "the 2008 consent decree to shield conduct."
- On September 2, U.S. District Court Judge Thomas S. Zilly denied motions by the National Association of Realtors (NAR) and Zillow to dismiss REX's antitrust and consumer protection law challenge to the NAR segregation rule. The Court held that REX sufficiently alleged that NAR and Zillow conspired to restrain trade and to harm consumers stating, "plaintiff has plausibly alleged that Zillow agreed to use the MLS rules to restrain trade."
Timeline: Recent Biden Administration Actions into Real Estate
- On July 1, the Department of Justice (DOJ) nixed a proposed Trump Administration settlement with NAR. The unprecedented action sided with REX's position in a February comment letter which called on the DOJ to back out of the settlement and take further action including a broader investigation into the association and its member companies' anticompetitive practices.
- On July 6, DOJ issued a Civil Investigative Demand (CID) to NAR as part of an antitrust investigation into "residential real estate brokerage services in metropolitan areas throughout the United States."
- On July 9, President Biden's executive order directed the FTC to address real estate competition. This painted a bull's eye on the broken broker practices REX was born to replace.
- On September 13, NAR challenges the US DOJ CID and in doing so makes public the full scope of the July 6 CID.
About the Federal Investigation into the National Association of Realtors
- The July 6 CID signals an expansive DOJ antitrust investigation into over 20 separate NAR and MLS policies, practices, and rules.
- The CID is focused on the mandatory offer of compensation to brokers, an existential threat to NAR.
- The CID targets the NAR segregation rule, with major potential implications for Zillow. REX is challenging Zillow's adoption of the segregation rule, and the CID demonstrates a clear interest by DOJ while the federal judge in the REX case greenlighted the case for discovery.
The full CID can be read here.
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