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For immediate Release, May 16, 2005 For more
information contact Chris Christensen: 703-536-7776
Homeowners Score Back-to-Back Internet Commerce Victories
American homeowners scored two vital victories for Internet Commerce in
the last three days. Under heavy pressure from the Department of Justice
and consumer organizations, the National Association of Realtors® (NAR)
board of directors on May 14 decided to withdraw its proposed policy on
Internet home sales. The policy would have allowed brokers to
selectively block Internet posting of home sales listings. The rule
would have been used to limit the marketing of homes by brokers who
provide home sellers deep discounts in their sales commissions.
A key factor in the decision was the likelihood that the U.S. Department
of Justice (DoJ) would file an antitrust lawsuit if the proposed policy
was adopted. At the urging of the American Homeowners Grassroots
Alliance (AHGA) and other consumer organizations, DoJ’s Antitrust
Division has been investigating NAR’s proposed rule for more than a
year. Unlike stock brokers, travel agents, and other brokerage
industries that have seen prices driven down by discount competition on
the Internet, real estate brokers have mostly been able to continue
charging commissions of around 6%.
AHGA had also asked the National Association of Realtors® to withdraw
their Internet home listings policy, which has been criticized by other
consumer groups as well. “At this point it is clear that the federal
government intends to pursue NAR if they put this rule into effect”,
noted AHGA President Bruce N. Hahn. “We believe that it is against the
best interests of your members to continue to oppose what we believe are
the inevitable changes in business practices that will embrace the real
estate sector, as they have many other business sectors.” AHGA also
praised the Bush Administration for siding with consumers on this issue.
“President Bush is rightfully very concerned about the lack of U.S.
retirement savings. Home equity is the largest single source of
retirement saving for most homeowners, and in effectively reducing the
bite of real estate commissions the Administration is helping all of us
save more for retirement” Hahn added.
A second major consumer Internet victory came on May 16 when the U.S.
Supreme Court, in a 5-4 decision, ruled that states cannot prohibit
consumers from purchasing wine directly from out-of-state wineries. AHGA
and other filers of an amicus curiae brief in Granholm v. Heald, argued
that Michigan and New York had enacted protectionist laws that
unconstitutionally discriminated against consumers as well as wineries
from other states.
“We particularly disagreed with the states' arguments that the possible
lost taxes could justify such laws” noted AHGA’s Hahn. “State
politicians have generally done a poor job of educating their own voters
about their obligation to pay sales tax on out-of-state purchases. They
know such taxes are unpopular and, rather than risk getting voted out of
office by their own constituents for urging compliance with unpopular
state laws, they seek instead to require merchants in other states
provide them free tax collection services.
The long-term effects of the decision may be very significant. States
have claimed the right to regulate out-of-state shipments of many
products. The Supreme Court's decision suggests that it will be unlikely
to support other similar protectionist measures.
AHGA is a national consumer advocacy organization serving the nation’s
75 million homeowners. More about AHGA is at www.AmericanHomeowners.org.
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