‘Lawfare is now the norm’: MLS leaders brace for more legal battles

The Multiple Listing Service (MLS) industry is confronting a wave of legal challenges, highlighted by Zillow’s antitrust lawsuit against Council of MLSs (CMLS) member Midwest Real Estate Data (MRED) and Compass International Holdings, and a renewed review of broker cooperation and competition guidelines by the Department of Justice (DOJ) and the Federal Trade Commission (FTC). Adding pressure, Compass CEO Robert Reffkin warned that any MLS that does not comply with his demands by October 6 will face a lawsuit. At CMLS’s Open House conference, legal experts underscored that the sector is at a “technological, power‑dynamics and legal inflection point,” with scrutiny coming from federal and state lawmakers, consumer groups, state attorneys general, and a retreat by the National Association of Realtors (NAR) from MLS rule‑making and enforcement, leaving MLSs directly exposed to potential litigation.

Attendees emphasized that the current legal landscape is shaped by past policies intended to mitigate earlier risks, such as the Clear Cooperation Policy born out of agents being ghosted or offered cash to hand over buyers. Kelly Lennox, chief legal officer of Northwest MLS, which recently settled an antitrust case with Compass, warned that litigation is pervasive and that MLSs cannot simply “lay low” and hope to avoid suits; instead, they must develop robust cooperative rules and assess acceptable risks. Ed Zorn, vice president and general counsel of California Regional MLS, highlighted the need to balance cooperation rules with the original intent of protecting buyer agents, noting that policies now under fire were originally designed to prevent agents from being sidelined or bribed. Brian Schneider, partner at ArentFox Schiff and general counsel for Bright MLS, urged leaders to “game out” possible outcomes—whether an active case is won or lost, whether Compass sues, or whether similar policies trigger lawsuits elsewhere—to chart alternative paths and mitigate exposure.

The broader implications extend to the core functions of MLSs: mandatory listing submission and participation, which underpin compensation and cooperation. With the loss of compensation in 2024 and growing concerns that brokers might withhold listings while still accessing MLS databases, industry leaders question whether MLSs should police such broker behavior and how that might affect consumers. Zorn cautioned that frequent references to “seller’s choice” often mask a lack of genuine options for sellers. As legal and regulatory pressures intensify, MLS executives are urged to prioritize risk management, refine cooperation policies, and prepare for an era where “lawfare” becomes the norm, shaping the future of real‑estate data sharing and market competition.

⚡ Effects Interpreter