Opinion ID: 2999248
Heading Depth: 2
Heading Rank: 3

Heading: Anti-Competitive Effects of the Code of Ethics

Text: Reifert claims that Article 16 of the Code of Ethics of the National Association of Realtors is anti-competitive and violates Section I of the Sherman Act, 15 U.S.C. § 1. Article 16 prohibits members of the National Association of Realtors from interfering with the exclusive agreements other members have established with clients. Reifert’s allegations concerning the anti-competitive effects of Article 16, however, are overly broad. As the National Association of Realtors, Code of Ethics Standard of Practice 16-2 states, “Article 16 does not preclude Realtors® from making general announcements to prospects describing their services[.]” Rather, the Article’s purpose is to prevent the targeted solicitation of individuals who have exclusively listed their property with another agent and to prevent agents from improperly using multiple listing services as a data bank of potential customers. We must review a challenge to Article 16 under the rule of reason to determine whether the agreement contributes to competition and productivity. See Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 695 (1978). Under the rule of reason, Reifert had the burden to demonstrate that Article 16’s net effect was anti-competitive. See Bi-Rite Oil Co. v. Ind. Farm Bureau Co-op. Ass’n, Inc., 908 F.2d 200, 203 (7th Cir. 1990). The balance between pro- and anti-competitive effects weighs heavily in favor of Article 16. Even in “open” MLS areas such as Massachusetts and Alaska, where individuals who have not joined a Realtors Association may access an MLS service, users must agree not to solicit the exclusive No. 05-3601 15 listings of other MLS users during the term of the listing. If agents were reluctant to post their listings, for fear that other agents would steal their clients, the market would become less transparent and less efficient. Article 16 aids competition and fulfills the purposes of the Sherman Act by providing a more transparent marketplace.