## Facts

- Realcomp II, Ltd. operated a multiple listing service (MLS) used by member real-estate brokers in southeastern Michigan.
- Participation in the MLS was a key input for residential real-estate brokerage in the area, with no close substitutes for effective listing exposure.
- Some brokers offered limited-service or discount brokerage options, including “exclusive agency” (EA) listings, often at reduced or flat-fee prices.
- Realcomp adopted rules that treated EA and other nontraditional listings less favorably than traditional “exclusive right to sell” listings.
- The challenged “website policy” barred EA and certain other nontraditional listings from being transmitted through MLS data feeds to public-facing real-estate websites (including Realcomp’s public site and brokers’ IDX sites), even though those listings remained visible within the MLS to members.
- The FTC alleged the policy reduced consumers’ access to lower-priced alternatives and protected traditional commission-based brokerage from competitive pressure.

## Issues

1. Whether Realcomp’s website policy constituted concerted action (a contract, combination, or conspiracy) among competing brokers for purposes of Sherman Act § 1.
2. Whether substantial evidence supported the FTC’s rule-of-reason findings that the website policy had potential and actual anticompetitive effects in the relevant market.
3. Whether Realcomp’s asserted procompetitive justifications (including free-riding and consumer-confusion rationales) were sufficient to outweigh the restraint.
4. Whether the FTC properly concluded that the policy violated FTC Act § 5 based on an unreasonable restraint of trade analyzed under Sherman Act § 1 principles.

## Decision

- The Sixth Circuit denied Realcomp’s petition for review and affirmed the FTC’s cease-and-desist order.
- The court treated Realcomp’s MLS rules as horizontal agreements among competing brokers, satisfying the concerted-action requirement.
- The court held substantial evidence supported the FTC’s findings that Realcomp had substantial market power in the relevant market.
- The court upheld the FTC’s determination that the website policy created likely competitive harm by limiting the ability of discount and limited-service brokers to reach consumers through widely used public websites.
- The court upheld findings of actual anticompetitive effects, including reduced consumer choice and evidence of reduced share of EA listings after implementation of the policy.
- The court agreed Realcomp’s proffered justifications were insufficient and not shown to be reasonably necessary in light of less restrictive alternatives.
- The affirmed order required Realcomp to stop enforcing discriminatory restrictions and to revise rules to avoid unequal treatment of nontraditional listings.

## Legal Principles

- Rules adopted and enforced by an association of competing firms can constitute horizontal concerted action under Sherman Act § 1.
- Under the rule of reason, a restraint may be condemned based on substantial evidence of (1) market power plus likely harm to competition, and (2) actual anticompetitive effects, with the burden then shifting to defendants to supply persuasive, restraint-specific justifications.
- Restraints that limit rivals’ access to effective marketing channels and suppress low-price competitive options can support a finding of unreasonable restraint, particularly where the platform controlling access has market power.
- Procompetitive explanations such as preventing free riding must be supported and tied to the challenged restraint; unsupported rationales or those achievable through materially less restrictive means may fail to rebut a prima facie case.
- FTC Act § 5 reaches concerted conduct that unreasonably restrains trade, and the FTC may apply Sherman Act § 1 rule-of-reason analysis to determine a § 5 violation.

## Conclusion

The Sixth Circuit upheld the FTC’s determination that Realcomp’s MLS website-distribution restriction was a horizontal restraint that, given Realcomp’s market power, harmed competition by impairing the online visibility of discount and limited-service listings, and that Realcomp’s asserted justifications did not overcome the FTC’s rule-of-reason showing; the FTC’s remedial order remained in force.


Realcomp II, Ltd. v. F.T.C., 635 F.3d 815 (6th Cir. 2011)