Antitrust lawsuit filed against REBNY listing.

BrokersNYC, a listing service provider for residential brokers, has filed an antitrust lawsuit against REBNY, REBNY's board members and a number of residential brokering firms including the Corcoran Group and Brown Harris Stevens among others. Alleging that the over 30 defendants conspired to monopolize the listing service market, BrokersNYC is seeking access to REBNY's residential listings as well as up to $16 million in compensation for damages resulting from its exclusion.

The case, which could enter court as soon as early December, hinges on the charge of illegal tying, which under the Sherman Antitrust Act is one of the hallmarks of monopolization. According to the complaint, REBNY has tied access to its listings with the subscription and purchase of proprietary database software ROLEX and Real Plus.

BrokersNYC asserts that for those among its clients who are REBNY members, access to REBNY listings should be allowed using BrokersNYC's database software as well.

REBNY stated that not one of its members has directly approached the Board on behalf of BrokersNYC during the past two years. "It is a system that has apparently failed to prove its value, a spokesman for REBNY said.

"It is also appropriate and reasonable for the Board to utilize one vendor for this service to guarantee its integrity and proper service. Listing services nationwide commonly require the use of one vendor for this very same reason," the spokesman for REBNY said.

"More than 225 residential firms now share their exclusive listings and better serve their clients. An unhappy vendor who can't sell her services will not stop us from continuing to better serve the public," the spokesman stated.

David Scharf, a lawyer not involved in the suit but who represents the William B. May Company--a defendant that presently retains a joint counsel along with the other defendants--claimed that a major problem with the plaintiff's ease is that it will have trouble demonstrating a significant barrier to gaining access to REBNY's listings. A required proof of monopolization, "barrier to entry" doesn't seem provable in this case because REBNY's membership fee as well as the software needed to access is listings is, according to Scharf, "only a few hundred dollars, not nearly enough to really prevent someone from viewing this information."

"But I think that the current price of ROLEX and Real Plus is a teaser," said a small broker who is a client of BrokersNYC and asked to remain anonymous. "Without any competition in the market for such database software, the cost to access REBNY's listings could go up markedly."

Scharf contended that such a claim is unfounded considering REBNY's track record.

"REBNY is an incredible association in terms of what its members get for their money and I don't think many people will dispute that," Scharf said. "This isn't an association that has charged for something and then started increasing that price arbitrarily or unfairly or even at all. The claim that REBNY's listing service will become more expensive is false speculation."

The defense, according to Scharf, will focus on a number of other points, including their contention that the listing market is one that inherently can't be monopolized and also that REBNY's system doesn't disrupt interstate commerce, a necessary qualification for a monopolization conviction.

"The defense is going to be resounding," Scharf said. "I think you're going to see a motion to dismiss here, an attack by the defense at what are the fundamental elements in an antitrust suit and how they have not been violated in this case. This suit brought by the plaintiff is creative but it's a long shot."