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Wednesday, Jun 19, 2024

Listing Service Conflict Results in Lawsuit

San Diego’s largest Realtor association hit the county’s other two Realtor groups with a federal antitrust lawsuit last month, accusing them of improperly wielding control of the area’s multiple listing service and blocking access to some housing data.

The Greater San Diego Association of Realtors sued the North San Diego County Association of Realtors and the Pacific Southwest Association of Realtors on Jan. 14, along with Sandicor Inc., the multiple listing service(MLS) jointly owned by all three Realtor groups.

An MLS is a database of home information collected and shared among brokers.

GSDAR alleges in the lawsuit the other two associations used their majority on Sandicor’s board of directors to cut off access to listing data GSDAR was contractually entitled to, wielding control of the company as an “anticompetitive weapon.” Sandicor, however, counters that it hasn’t favored any of the three groups and that it is individual brokers, not the three associations, who own the data in the MLS.

GSDAR is seeking at least $1.5 million in damages and an order requiring the defendants to change their policies regarding the MLS data. It also wants to force an inspection of Sandicor’s finances.

Representation on the Board

Sandicor was formed in 1991 to consolidate the databases of the 11 Realtor groups in San Diego at the time. There are now only three groups, with GSDAR owning about two-thirds of Sandicor shares, NSDCAR owning about 22 percent and PSAR owning 10 percent. The board of directors was set up with more even representation, according to the lawsuit; GSDAR and NSDCAR each have four votes, while PSAR has three.

GSDAR alleges it developed a website called Just Knock to display neighborhood housing data and connect users to its brokers, but it required access to Sandicor’s data collected from all three members.

NSDCAR and PSAR saw the site as a direct competitive threat, according to the lawsuit, and prevented GSDAR from getting the full dataset. Once GSDAR tapped a vendor to access a syndicated feed on its behalf, Sandicor allegedly told the vendor it could only use information from GSDAR’s brokers unless the other groups’ brokers elected to have their data included.

GSDAR claims it is entitled to unfettered access to the information and that Sandicor breached its contractual duties by refusing access.

Sandicor shares its full database with other groups, including the San Diego Union-Tribune, but when pressed at a board meeting about such activity, Sandicor’s chairman allegedly said that was “because they aren’t competing with us,” according to the lawsuit.

Defendants Call It Meritless

The defendants generally dismissed the allegations as meritless and factually inaccurate in prepared statements. Sandicor said it gave GSDAR data that came from its own brokers, but Sandicor’s directors felt other brokers should decide where their listings appear.

The UT’s active listings access stems from a deal first signed in the mid-1990s, which will end by February, according to Sandicor CEO Ray Ewing. Current data syndication deals now require brokers to opt-in, but technology didn’t exist then to make individual determinations.

“GSDAR is also mistaken if it believes it owns all of the countywide MLS data simply because it is a shareholder of Sandicor,” Sandicor said in its statement. “Even Sandicor does not own the MLS data. The MLS data is owned by the brokers, who have given a license to Sandicor to use such information to operate the MLS.”

It also argued GSDAR was pushing Sandicor to turn over some of its MLS functions to GSDAR, but that the other two groups felt basic functions such as technical support should be centrally provided.

An attorney for GSDAR said the disagreement was not over ownership, but access.

“This dispute centers on our ability to enjoy the same rights of access for our members,” said Alexis Gutierrez of Higgs Fletcher & Mack LLP. “The MLS has stepped into the shoes of a competitor.”

The lawsuit further claims Sandicor has structured certain initiatives it knows GSDAR is opposed to in such a way to avoid bylaws requiring GSDAR’s approval.

Sandicor uses its budget, which is mostly provided by GSDAR, for education services and other products for all three groups’ members, which is beyond the company’s intended purpose, the lawsuit said.

Ewing also encouraged members to leave GSDAR in favor of one of the other two Realtor groups, the lawsuit claims.


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