Settlement reached in REBNY anti-trust suit

New York /
Jun.June 13, 2008 01:40 PM

A settlement has been reached in a lawsuit filed by a listings services provider against the Real Estate Board of New York and others over charges that the trade organization blocked access to its listings.

The suit, filed by Klickads, which does business as BrokersNYC, claimed that a conspiracy prevented REBNY listings from being shared, a breach of federal antitrust regulations. BrokersNYC also offers marketing and Web design services.

Other defendants included a data transmission service called R.O.L.E.X. and a database service called RealPlus, both developed by Terra Holdings, which is the parent company of two big REBNY members, Brown Harris Stevens and Halstead Property. Another defendant was the listings services provider On-Line Residential, also known as OLR.com.
 
Lala Wang, founder and CEO of BrokersNYC, claimed that many of her small clients were denied access to listings despite being REBNY members, which she claimed was in violation of the Sherman Anti-Trust Act. The lawsuit alleged that REBNY and its service providers colluded and were able to gain control of about 70 percent of the city’s listings. 
 
The terms of the agreement were kept confidential, but sources who asked to remain anonymous said that BrokersNYC would receive at least $2 million in damages and get access to REBNY’s exclusive listings through a feed.

The trade organization’s president, Steven Spinola, confirmed that a settlement had been reached and that listings would now be provided to BrokersNYC, as well as another party, whom he declined to identify.
 
However, Spinola said “there was no admission of liability by either party.” He expressed some relief, saying, “It’s over and after today, I don’t want to talk about it ever again.”
 
Andrew Friedman, an attorney at Glancy, Binkow and Goldberg representing BrokersNYC, said he would not confirm the terms of the agreement because they were confidential. 
 
Calls to RealPlus managing director and R.O.L.E.X. co-owner Eric Gordon were not immediately returned.

The president of OLR.com, Jonathan Greenspan, refused to comment.

Wang, who founded BrokersNYC in 1991, told The Real Deal last August that the dispute went back to 2003, when large broker members of REBNY gained the ability to exchange real estate listings, but BrokerNYC’s smaller REBNY member clients did not.
 
“The basis of this lawsuit is that the parties’ actions hurt BrokersNYC’s ability to serve small brokers,” Wang said then. “Ultimately, consumers are hurt when small brokerages don’t have the same advantages as large brokerages.”

The suit also alleged that prior to 2003, BrokersNYC, RealPlus and OLR.com each had about one third of the city’s automated real estate listings, but that by 2006 RealPlus’ share had increased to 70 percent and BrokersNYC’s had fallen to 13 percent.
 
Wang’s suit claimed that RealPlus received preferential treatment because it is owned in part by Terra Holdings. The suit also claimed that OLR.com became a data provider through a relationship with CitiHabitats, a large REBNY member firm.

Others named in the suit included Sotheby’s International Realty, The Corcoran Group Stribling & Associates, Fox Residential Group, Bellmarc Realty and Heron Properties Realty.
 
In an interim ruling issued last August by U.S. District Court Judge Leonard B. Sand, some anti-trust allegations were dismissed, but BrokersNYC’s suit was allowed to proceed because the judge ruled that REBNY had denied access to its listings.
 
Sand wrote in his decision that REBNY had the ability to keep information flowing to big firms because “common ownership of RealPlus and several brokerage defendants who control a substantial number of REBNY’s board seats” provided “a motive to reduce the competition.”

Another settlement in a bigger legal battle over brokerage listings was reached on May 28 between the U.S. Department of Justice and the National Association of Realtors. The antitrust suit accused the association of withholding member listings from online competitors. NAR policies prevented consumers from receiving the full benefits of competition, discouraged discounting, and threatened to lock in outmoded business models, the DOJ said. The lawsuit was scheduled to go to trial in July.


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