The Use Of Consent Decrees As Enforcement Tools of the DOJ/FTC

Consent Decree…

The antitrust dispute between the US Department of Justice (DOJ) and the National Association of REALTORS (NAR) in 2008 around the public display of MLS data and new business models (Virtual Office Websites/VOWs), resulted in a 10-year Consent Decree.

Are we now on a slow path to another DOJ inspired Consent Decree with:

Mass confusion about the Proposed NAR Settlement in Sitzer, with sometimes conflicting interpretations, and sometimes no clear definitions of terms? (I have been speaking with major trainers and experts around the country and the degree of misunderstanding is considerable).

Will the current situation, if left in its current state, lead us to “Definition through litigation.”

Do the plaintiffs and defendants really understand what they have negotiated?

The Department of Justice and its desires to disrupt the residential real estate Industry? What will the DOJ say on June 25th in the MLS PIN Case? How will the DOJ’s public position in the MLS PIN case align (or not) with the Settlement in Sitzer?

Real estate law being jurisdictional by state adds to the confusion.

Timelines and obvious conflicts and requirements to adjust to a moving target by practitioners, MLSs, and consumers.

How does the NAR Proposed Settlement indicate who will “enforce” the current proposed Settlement and what does enforcement entail?

What is the difference between policing and enforcing and how will this be accomplished and at whose expense?

Influence of other players such as the Federal Reserve, the White House, and perhaps some major platforms?

With the above thoughts and questions in mind:

What is a Consent Decree?

A consent decree is a court-ordered agreement between parties. It has the force of a court order and is typically used in situations where:

The parties want to avoid the expense and uncertainty of a trial.

There is a need for judicial oversight to ensure compliance with the terms of the settlement.

The parties wish to maintain some control over the resolution process, as opposed to having a resolution imposed by the court.

Common Areas for Consent Decrees…

Antitrust Law: Used to settle disputes where a company is accused of anti-competitive practices. The company may agree to change its behavior without admitting wrongdoing.

Environmental Law: Used by regulatory agencies like the Environmental Protection Agency (EPA) to enforce compliance with environmental laws. A company might agree to clean up pollution or change operations to reduce environmental impact.

Civil Rights Law: Often used to resolve allegations of discrimination or civil rights violations. For example, a police department might agree to implement reforms to address patterns of misconduct.

Labor Law: Can be used to settle disputes between employers and employees regarding working conditions, discrimination, or wage issues.

Stay tuned, we may be looking at another Consent Decree scenario regarding alleged antitrust claims regarding residential real estate practice.

 

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  1. A recent Consent Decree came last year when the FTC blocked the merger between Black Knight and the Intercontenental Exchange (ICE). The FTC believed the deal would give Intercontinental Exchange (ICE) “too much power in the multi-trillion dollar U.S. mortgage market, and come at the expense of both higher home prices for consumers and competitors in the mortgage data and services industry. FTC issues Consent Order — “This deal as originally structured would have reduced competition in key areas of the mortgage origination process, raising costs for lenders and homebuyers,” the FTC Bureau of Competition’s Director Henry Liu said in a statement. “To address these concerns, the Commission’s order provides structural relief and a variety of tools to preserve competition in these critical markets.”
    Interestingly, the attorneys for Black Knight argued — in a manner sounding like the defendant attorneys in the Sitzer commission lawsuit that the DOJ did not understand the dynamic nature of the real estate transaction process– that the FTC allegations regarding pricing and eligibility engines were “based on a fundamental misunderstanding of the competitive dynamics for product and pricing tools.” P.S. – As part of the Consent Decree the merger agreement was amended, resulting in a $1.4 Billion dollar drop in valuation from the original merger price of $13.1 billion.

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