In a significant ruling for the real estate industry, a federal jury in the Western District of Missouri, on October 31, 2023, held the National Association of Realtors (NAR) and multiple other real estate brokerages accountable for antitrust violations. They were found guilty of conspiring to inflate the broker commission costs for residential home sales (JD Supra) .
The violation resulted in significant financial damage. The jury awarded a staggering $1.78 billion in damages to the class members. These members include sellers of more than 260,000 residential homes across Missouri, Kansas, and Illinois from 2015 through 2022.
This case underscores the increasing scrutiny that professional associations and large corporations are facing over their business practices, particularly in relation to consumer pricing. The ruling is an important reminder to businesses of all sectors of the need for regular compliance checks and legal audits to identify and mitigate any potential antitrust risks.
- NAR, along with other involved real estate brokerages, was found to have conspired to artificially increase broker commission costs, which, according to the plaintiffs, is an unfair business practice that leads to higher costs for consumers.
- The heavy fine imposed reveals the significant risk companies undertake when suspected of anti-competitive behavior. It reinforces the importance of compliance with antitrust laws.
The aftermath of this ruling could have far-reaching implications, extending beyond the real estate industry. It is likely to lead to increased audit activities across various industries as corporations seek to ensure their own business practices align with legal guidelines to avoid similar lawsuits.
The reader is advised to review the original article(JD Supra) for full details and to consult with experienced legal counsel to better understand its implications for their own corporate practices.
By: Manatt, Phelps & Phillips, LLP