The Justice Department's antitrust division charges that in order to use the Consolidated Multiple Listing Service Inc., brokers are required to offer identical services.
But the company - a joint venture of area brokers - prevents brokers who use it from offering innovative, potentially lower-cost services, the lawsuit says. The MLS includes critical lists of available properties.
The legal action aims to remove illegal barriers to competition "so that consumers will benefit from the additional options and reduced fees that competition can bring," said Thomas O. Barnett, assistant attorney general in charge of the department's Antitrust Division.
A message left for a company spokesman was not immediately returned Monday.
Multiple listings services compile information about available properties and allow real estate agents to search them according to locale and features. Agents pay fees to use the lists, which are crucial for selling agents when it comes to publicizing available homes to agents for potential buyers.
In the lawsuit, filed Friday in U.S. District Court in Columbia, federal prosecutors also claim the Columbia-based company is able to restrict or prevent brokers from outside the area from entering the local market. The lawsuit seeks an end to the practices and asks a court to decide whether other penalties are possible.
Justice Department spokeswoman Megan Gerking said the antitrust division has been monitoring multiple listing services in the past few years to ensure they are "competitively efficient."
The government alleges that the Columbia area listings company does not allow brokers to offer a fee-for-service model that is used in other markets to charge home buyers and sellers a flat fee for only the services they want to buy - such as just advertising a home on the listings service. It also claims brokers are not allowed to offer deals under which sellers would be able to find their own buyer and get out of paying a commission.
Without offering those types of innovative options, Columbia-area brokers "have stabilized the price those consumers pay for brokerage services."
Preston Young, president of the Greater Columbia Association of Realtors, said he isn't surprised at the lawsuit because of national attention on multiple listing services. But he said he feels that some of the practices used by Consolidated Multiple Listing Service of Columbia assist consumers.
"I've always thought that the multiple listing services and the Realtors were working toward a common goal and that is to protect the interest of the consumer and the public," Young said.
