Doj Is Still Keeping A Close Eye On Agent Commission Rules

The real estate industry did not manage to escape 2025 without a reminder that the Department of Justice (DOJ) is still closely monitoring the industry and the National Association of Realtors (NAR) for potential antitrust violations. 

In late December, the DOJ filed a statement of interest in the Davis homebuyer commission lawsuit, which was filed in May 2024 against Howard Hanna Real Estate Services. In the filing, which was signed by Assistant Attorney General Gail Slater, the DOJ urged the court to take a closer look at agent commissions, arguing that they are still possibly inflated due to “unreasonable” trade group rules that the department feels are inherently unlawful. 

While the DOJ did not opine on what the outcome of the lawsuit should be, it does address what it views as “erroneous” claims made by Howard Hanna in its motion to dismiss the lawsuit. In the motion, the brokerage defendant claims that the allegations of conspiracy cannot be substantiated because it centers on rules and conversations within Realtor associations, which they argue provide pro-competitive benefits for members and protect consumers’ homeownership rights.

In the statement of interest, the DOJ pushes back against this arguing that policies, even those promulgated by a trade association, can constitute concerted action and violate antitrust laws. As a result of this, despite Howard Hanna requesting that the judge apply the “rule of reason” in this lawsuit, which considers the pro-competitive effects of the rule along with any anticompetitive effects, the DOJ claims that a “per se” analysis, which assumes that the rule is inherently anticompetitive on face value.  

A more relaxed Trump DOJ? Doesn’t look like it

For many in the real estate industry, this action by the DOJ came as a surprise, as many had expected the Trump administration DOJ to have a more relaxed approach to antitrust enforcement. However, antitrust experts believe the action is inline with Trump administration priorities and historic actions of the DOJ. 

“The DOJ often files statements of interest simply to make sure that courts, who may not necessarily be specialists in antitrust law, understand the standards and so that then the court’s decisions don’t become bad law that is later cited by other courts,” Harrison McAvoy, a partner at Shinder Cantor Lerner, said. 

Despite this, Bradley Weber, a co-leader of Troutman Pepper Locke‘s antitrust practice, was a bit caught off guard by the DOJ’s recent action in the Davis suit. 

Housing is a populist issue

“Under the Biden administration, the DOJ and the Federal Trade Commission (FTC) were very active, filing statements of interest and taking positions in cases both in real estate and outside. It is a little surprising that even under Gail Slater that the DOJ would take such a hard view on these antitrust issues, but I think the real reason is that housing is something everyone has to pay for so it is a very populist issue,” Weber said. “So, I think the DOJ is looking at any kind of antitrust violations that could affect housing prices or rental properties and they are making their position known by filing these statements of interest.” 

While Marx Sterbcow, the managing attorney of Sterbcow Law Group, agrees with Weber’s assessment that the DOJ is keeping a close eye on things that could impact housing affordability, he was not surprised by the DOJ’s filing, as he has firmly held the belief that if the industry was not going to create its own cohesive reform, then the DOJ was going to come in and do it for them. If brokerages want to be proactive, Sterbcow said they should sit down with their legal counsel and figure out what they can and cannot do and to evaluate their risk tolerance for anything that falls in a grey area. 

Clarification of antitrust law

For McAvoy, this action by the DOJ largely serves as a clarification of antitrust law, and he is not alone in this view.

“The purpose was really to inform the court on the government’s view of whether or not industry rules could create a per se agreement among competitors,” Weber said. “The DOJ wanted to state on the record its position that there are situations including possibly this one, if the plaintiffs have properly alleged the facts, where industry rules could be a per se violation of the Sherman Act.”  

Sterbcow viewed things in a bit blunter terms. 

“They are basically saying the whole defense of NAR told us to do it and relying on NAR for coverage isn’t going to hold water anymore. You are now liable for your own actions and you can no longer say ’NAR or the local MLS told us to do it,’ because the DOJ says that you are in fact responsible too,” he said.

The DOJ’s perspective on this issue does pose some challenges for the industry, according to Sterbcow. 

Delegitimizing the MLSs?

“In some respects, and I really hate to say it, but it delegitimizes the MLSs to a large extent because one of the reasons you join an MLS is for that protection and now the DOJ is saying that protection doesn’t exist,” he said. 

Also taking what may be seen as a controversial view is Weber, who said that he agreed with the DOJ that an industry rule promulgated by a trade association or professional association could constitute a per se violation of the law. 

“I don’t think that just because it’s a trade association and it promulgates a rule that that automatically means that the court should analyze it under the rule of reason,” Weber said. “The statement of interest cites several cases, including Supreme Court cases dealing with NAR rules, that make it pretty clear that if a trade association’s rules are anticompetitive and would otherwise constitute a violation, the association is not shielded just because the rules were adopted under the guise of a trade group.” 

For now, it remains to be seen how Judge Wendy Beetlestone of the U.S. District Court for the Eastern District of Pennsylvania will view the DOJ’s arguments, as she is not required to adopt their perspective on this issue as she makes her decision on Howard Hanna’s motion to dismiss the amended complaint.