Antitrust and MLS - Tying and more

Time to review some of the finer points of MLS, Antitrust, membership, and illegal tying.

Does one need to be a REALTOR (A member of the National, State, and local association of REALTORS) to Subscribe of Participate in (join) an MLS?

We see this question often...with a great amount of misunderstanding.

Technically, the answer is yes, in every state but 4...California, Florida, Alabama and Georgia, based on two court cases, Palsson and Thompson. Some MLSs in other states, seeing the writing on the wall, have allowed non members of REALTOR associations to join.

In California, the 1976 case of Marin Board of Realtors v. Palsson, 16 Cal. 3rd 920 removed the requirement that a licensee must belong to NAR in order to participate in MLS.

In Florida/Georgia/Alabama, the 1991 federal

decision in Thompson v. Metropolitan Multi-List, Inc. 934 Fed. Rep. 2d 1566 reached the same result.

Palsson

https://casetext.com/case/marin-county-bd-of-realtors-inc-v-palsson

The court in Marin County Board of Realtors v. Palsson, 130 Cal. Rptr. 1, 549 P.2d 833, 843 (1976), said:

An association’s freedom to exclude non-members from its activities is not absolute. It must yield to antitrust laws when (1) its activities begin to correspond directly with and touch upon the business activities of its members; and (2) the association has the power to shape and influence the economic environment of its particular market.

The court held that for non-members to compete effectively access must be granted to all licensed real estate agents who choose to use the service. Accord, Pomanowski v. Monmouth County Bd. of Realtors, 152 N.J. Super. 100, 377 A.2d 791 (1977); Oates v. Eastern Bergen County Multiple List. Serv., Inc., 133 N.J. Super. 371, 273 A.2d 795 (1971); but see, Barrows v. Grand Rapids Real Estate Bd., 51 Mich. App. 75, 214 N.W.2d 532 (1974) (exclusion of non-members of real estate board from multiple listing service upheld where non-members were substantially able to complete and majority of sales in the area were not made through the service). Thus, where the multiple listing service is a vital competitive tool, requiring membership in the Board of Realtors is a violation of G.S. 75-1 and § 1 of the Sherman Act.

Thompson v. Metropolitan Multi-List, Inc.

https://casetext.com/case/thompson-v-metropolitan-multi-list-inc

The plaintiffs claim that Metro and the DeKalb Board of Realtors have been engaging in an unlawful tying arrangement. The plaintiffs allege that Metro's dominance in the market for multilist services allows it to force brokers into accepting the tied product, membership in the Realtors professional association in order to obtain the tying product, use of the multilist service.

Another case, near and dear to me, People v. National Association of REALTORS, 1981. I was a practicing broker in San Diego at the time. The San Diego Board of REALTORS was still under probation from this case when we created a regional MLS in San Diego, one of the first regional MLSs in the country, Sandicor.

https://caselaw.findlaw.com/ca-court-of-appeal/1835658.html

https://www.nar.realtor/legal/non-member-access-to-realtor-association-multiple-listing-services