DOJ Wants Antitrust Review of Real Estate Commissions in Davis Lawsuit

“This case provides another opportunity for a court to review allegedly anticompetitive agreements that taint the real estate industry,” the filing said.

During the first eleven months of this second Trump administration, it appeared that the DOJ was loosening its oversight of the real estate industry and the National Association of Real Estate Agents (NAR), but that era appears to be over, as this latest filing shows that the DOJ is still keeping a close eye on some of the same practices in the real estate industry.

“The United States has a critical interest in promoting competition among real estate agents, which directly impacts consumers’ wallets. Competition ensures low commissions and promotes high-quality brokerage services aimed at helping buyers find and afford their ideal home,” the statement of interest said.

Although filed in the Davis lawsuit, the DOJ has no opinion on what it believes the outcome of the case should be, but does allege that Howard Hanna made “erroneous” claims in her filings, regarding the application of antitrust law and the allegations of “concerted action” to artificially inflate agents’ commissions.

In all the commission lawsuits, including Davis, the brokerage defendants have argued that conspiracy charges are unsubstantiated because they focus on rules and conversations within brokerage associations, which they argue provide pro-competitive benefits to members and protect consumer property rights.

In its filing, the DOJ has opposed this idea, arguing that policies, even those promulgated by a trade association, could involve concerted action and violate antitrust laws. In addition, Howard Hanna has asked the judge to apply the “rule of reasonableness” in this lawsuit, which considers the pro-competitive effects of the rule, along with any anti-competitive effects. The DOJ also took issue with this, asking the court to instead adopt a “per se” analysis, which was used in the Sitzer/Burnett lawsuit, which assumes that the rule is inherently anticompetitive on its face.

“When parties enter into an inherently anticompetitive agreement, the agreement is necessarily unlawful, whether it takes the form of an association rule or something else,” the DOJ wrote in the filing. “For that reason, the Supreme Court has repeatedly applied the per se rule in cases involving association rules, including real estate association rules.”

“Hanna’s efforts to raise the legal standards governing trade association rules are not supported by the Sherman [Antitrust] Law or the case law that interprets it. And if these efforts are successful, they would undermine Congress’s pro-competition policies and harm the homebuyers these policies protect,” the DOJ added.

Howard Hanna did not return HousingWire’s request for comment on the DOJ filing and NAR declined to comment.