Realtor.com ReadyConnect (Opcity) Antitrust

A copy of the complaint filed with the US DOJ and the US FTC asking to review practices of Realtor.com ReadyConnect (Opcity).

A copy of the author’s official request that asks the United States Federal Trade Commission, the United States Department of Justice, and the United States Consumer Financial Protection Bureau to investigate Realtor.com ReadyConnect Opcity shell real estate brokerage operating in an open collusion with Opcity Partner Agents on the grounds of an alleged violation of the Federal Trade Commission Act of 1914 (15 U.S.C. Section 45) an alleged violation of the Sherman Antitrust Act of 1890 (15 U.S.C. Section 1) an alleged violation of RESPA Section 8 (12 U.S.C. 2607) as well as any other possible violations of antitrust and consumer protection laws currently ratified and enforced in connection with alleged broker-to-broker market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices.

Attn: Citizen Complaint Center, Antitrust Division
950 Pennsylvania Ave., NW Room 3322
Washington, DC 20530

Attn: Office of Policy and Coordination, Room CC-5422
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Ave. N.W.
Washington, D.C. 20580

Attn: CFPB Regulatory Implementation
Consumer Financial Protection Bureau
1700 G St., NW
Washington, DC 20552

Please see information about a possible antitrust violation as described below.

What are the names of companies, individuals, or organizations that are involved?

Realtor.com ReadyConnect (Opcity) (DBA Opcity, Inc.)
6800 Burleson Road, Bldg. 312, Suite 125
Austin, TX 78744
Phone: (512) 233-6530
Texas TREC License 9005100

Further, a partner agent network of more than 100,000 licensed real estate agents who choose to execute blanket broker-to-broker referral agreements in alleged collusion with Realtor.com ReadyConnect (Opcity) brokerage.

Acting as the "spokes" within the "hub-and-spoke" broker-to-broker collusion scheme, Opcity Partner Agents are independent Realtors firmly affiliated with various brokerages such as Berkshire Hathaway HomeServices, eXp Realty, Windermere Real Estate, Keller Williams Realty, Inc., RE/MAX, Coldwell Banker, NextHome, Inc., HomeSmart, Compass, John L. Scott Real Estate, CENTURY 21, Realty ONE Group, Vylla, ERA Real Estate, Weichert Realtors, Better Homes and Gardens Real Estate, Fathom Realty, Intero Real Estate Services, John R. Wood Properties, Worth Clark Realty, Sotheby's International Realty, etc.

How do you believe they have violated the federal antitrust laws?

Realtor.com ReadyConnect (Opcity) is a broker-to-broker collusion network designed to collect fees by matching consumers with local real estate agents willing to collude and engage in price fixing and unlawful allocation with Opcity's parent company - Move, Inc. Opcity operates as a licensed real estate brokerage in Texas under TREC License # 9005100, but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State. Opcity engages in market allocation scheme because the referring broker effectively agrees not to compete with the referred brokers for any leads that pass through it.

When consumers submit information to Realtor.com ReadyConnect (Opcity), this information is simply sold to real estate agents who are willing to pay for it with 30%-40% share of their commission. Referral fees are inevitably passed down to consumers in the form of higher commissions.

Realtor had acquired Opcity in 2018, making this scheme one of the most scaled and damaging Referral Fee Networks in the United States. In this process Opcity "qualifies" and "dispatches" consumers, where consumers are no longer in the driver's seat, but instead, are traded as a commodity.

Can you give examples of the conduct that you believe violates the antitrust laws? If so, please provide as much detail as possible.

Recently, Opcity has further engaged itself in a price-fixing scheme called Buyer Cash Rewards program. In this scheme, consumers receive a cash reward from Opcity when they close on a home with an independent agent participating in the network. Opcity actively promotes this scheme to buyers in select markets when they inquire about a property on the Realtor website or mobile app.

After submitting a property inquiry or choosing to connect with an agent on Realtor, the buyer is contacted by an Opcity representative within seconds to begin the screening process. Opcity then dispatches “fresh lead” and the first agent to claim the referral “wins” and gets live-connected to a ready buyer who is financially motivated to work with them. Once the agent and buyer close on a home, Opcity manages and distributes the reward directly with the buyer. The cash reward is based on the price of the home and is determined by Opcity, ranging between 600 USD for lower price homes to 12,000 USD for homes worth 4 Million USD and up.

In the 4 Million home purchase example, a consumer receives $12,000 as a price-fixed rebate, and Realtor-Opcity scheme secretly collects 35% kickback of $42,000 from the BAC (Buyer Agent Commission) earned by a colluding broker. The consumer, in effect, is scammed out of tens of thousands of properly negotiated rebates when Relators collude on the basis of price fixing and kickbacks, rather than compete with one another on the basis of negotiated commissions and savings.

The Buyer Cash Reward is managed and distributed by Opcity. The participation in the Client Rewards is subject to no upfront cost to the broker, but the colluding real estate broker pays a massive unlawful kickback on the closed transaction.

Buyer Cash Reward program managed by Opcity is a violation of antitrust laws for several reasons.

First, Opcity is an active licensed real estate broker that willfully chooses to disengage itself from genuine completion with other brokers. Brokers only sign up into Opcity referral network knowing that Opcity brokerage will not directly compete for client representation. This is a form of consumer allocation between actively licensed brokers.

Second, Opcity offers a refund to consumers from a referral fee earned, not from a commission earned. This is a form of collusion and is effectively a kickback on to another kickback, instead of a legal buyer's rebate mechanism.

Third, in 40 States that allow buyer’s rebates, brokers are not allowed to share their commissions with non-licensed persons, unless a non-licensed person is directly involved in a transaction, such as an agent issuing a refund to a client after the transaction. In this price-fixing scheme, Opcity is not involved in a transaction of the actual home purchase and, therefore, it shares proceeds from a separate transaction that does not involve the actual purchase of the property. This act is without any legal merit since Opcity does not produce any tangible service to the purchaser of a home.

Opcity, in effect, offers consumers price-fixed "carrot before the nose" savings, but not as a competitive mechanism, but rather a product of price-fixed collusion. Opcity chooses the participants in the scheme, it unilaterally distributes leads from consumers in the interest of preserving the collusion, for which all brokers in the scheme pay with a cut of their earned commissions.

In reality, consumers always overpay for commissions due to the hidden kickbacks and price-fixed collusion between Opcity and Opcity Partner Agents. Consumers are further steered in a pay-to-play scheme toward unethical set of brokers, away from honest agents. Opcity Partner Agents act as spokes in a hub-and-spoke conspiracy, where all rebates are set exactly the same for every participant, therefore, none of these independent Realtors compete with each other on pricing or levels of service at all. In fact, all Opcity Partner Agents compete for the "hubs" attention with kickbacks.

While Opcity is perfectly free to set rates for services within their firm, price-fixing rates with competitors is a "per se" uncompetitive practice. Opcity is a licensed broker, like any other.

Saving consumers from having to pay excessive brokerage fees can never be justified with price-fixing, especially in exchange for a financial gain between brokers. The blanket referral fee received by Opcity for setting up these price-fixing terms is the only reason the collusion scheme functions. Opcity has no interest in saving consumers on fees, it is only interested in earning the largest kickbacks possible from the largest number of home sale transactions as part of orchestrating the scheme. In effect, by controlling the prices offered to consumers, Opcity is able to find “a middle ground” that accommodates the colluding broker, the kickback, and offers just enough savings to consumers to engage with the scheme.

Section 1 of the Sherman Act states: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce … is declared to be illegal." This means that (1) there must at least two parties agreeing to take action, and (2) the agreed-upon action must restrain free trade. Price fixing and consumer/market allocation agreements are "per se" violations of the Sherman Act because these practices are inherently harmful to consumers; in other words, no defense or justification is allowed.

The free commerce belligerents in this hardcore price-fixing scheme are Opcity and any broker they refer a consumer to subject to these terms. These two independent parties are carrying out a common course of action by setting fixed commissions with the use of blanket referral agreements for mutual financial gain.

Opcity systematically steers consumers toward Partner Agents and away from highly competitive agents that operate outside the network. Agents must never agree on commission rates or rebate amounts with any outside party. Agents must take care to avoid even the implication that they have discussed or reached an agreement about their service fees, service offerings, and rates due to any outside influence with another broker.

Commission listing rates and buyer rebates should never be fixed through collusion. All commissions and rebates must be set by each real estate agent individually and may only be negotiable between the consumer and the real estate agent.

Fourth, this scheme is equivalent to a mechanism for price-fixing services of others. By fixing Buyer Cash Rewards amounts for independent brokers outside of their firm, Opcity mandates the refund an agent must provide to receive a referral, while the true intention of Opcity is to motivate the consumer to use the network, despite the added referral fee.

Fifth, nothing stops Opcity from further manipulation for an optimal referral fee/cash rewards amounts with independent brokers as a way to bait consumers to use their service for no other reason but to earn a referral fee from the home purchase. Opcity remains a dominant broker (as a News Corp Realtor.com Move subsidiary) that orchestrates over a 100,000 plain price fixing agreements with independent Realtors all around the United States. Opcity is a broker-to-broker collusion scheme, where Opcity Partner Agents unlawfully agree to pay massive kickbacks to receive consumers' information and engage in market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices in violation of, inter alia, 18 U.S.C. § 1346, 18 U.S.C. § 1343, 15 U.S.C. § 1, 15 U.S.C. § 45, 12 U.S.C. § 2607, C.F.R. § 1024.14.

Consumers will ALWAYS significantly overpay for Realtor commissions subject to hidden kickbacks and pay-to-play steering promoted in Opcity's broker-to-broker price fixing scheme.

What is the product or service affected by this conduct? Where is the product manufactured or sold, or where is the service provided?

Consumer brokering is an act of selling information of potential home buyers and home sellers (paid referrals) between real estate brokers, in exchange for a cut of a broker’s commission. Brokers on each side of the adopted scheme, cause direct damage to the real estate representation market with reverse competition, anticompetitive market allocation, price-fixing, lack of competition, limited choices to consumers, unnecessary high commissions, and improperly negotiated fees. A referring broker in such a scheme effectively agrees not to compete with referred brokers, or to only compete with referred brokers on a limited basis. Opcity, in this case, takes the scheme to the next level by baiting consumers with a cut of a referral fee as a way to persuade them to use an overpriced service, and/or to further price fix services of independent agents to make the scheme viable.

12 C.F.R. § 1024.14(g)(1)(v) (Regulation X) and RESPA 12 U.S.C. § 2607(c)(3) narrowly allow payments pursuant to cooperative brokerage and referral arrangements between real estate agents and real estate brokers. This limited exemption on kickbacks only applies to fee divisions within real estate brokerage arrangements when all parties are acting in a real estate brokerage capacity. Opcity does not act in a brokerage capacity, in fact, this broker willfully chooses to disengage from offering real estate representation services to consumers as means of attracting colluding Realtors into the scheme. All colluding Realtors know that Opcity, acting as a conspiracy hub, is a "shell" or a "sham" brokerage that does not compete to represent any consumers in any real estate transactions.

A RESPA cooperative brokerage exception does not allow for kickbacks between brokers as a means for consumer brokering. Kickbacks in the real estate industry are what RESPA aims to resolve between any part of a real estate settlement service. Real estate transaction is a rare, high value, and high risk-aversion experience – it is easily subjected to kickbacks, especially with the use of the Internet. Consumers are often subjected to high commissions and hidden referral fees without a full understanding that these fees increase their commissions, or result in a lower quality of service. In this case, consumers are offered "savings" when, in fact, they are subjected to hidden kickbacks and price fixing above market rates. With Opcity, consumers hire two colluding brokers to perform the work of one, where one of the brokers does not perform any real estate settlement services. Price fixing of buyer rebates for a third party is not a legitimate service because it is a felony subject to prosecution under Sherman Antitrust Act.

Realtor.com is an MLS aggregator and one of the top three most popular web sites for home shoppers in the United States, alongside Zillow and Trulia. This scheme has the potential to irrevocably damage all competitive forces in the industry and to subject the home buying and selling process to a massive price-fixing and consumer allocation scheme by means of nationwide MLS aggregation.

Realtor and Opcity call themselves "a true end-to-end solution," not because it results in savings and a fair approach to residential real estate process, but because such consumer brokering scheme is capable of placing an unlawful 30%-40% rake on a massive volume of home buying fees (Buyer Agent Commissions) in the United States. Realtor commissions are the single largest closing costs line item when buying a home, even if these fees are not paid out-of-pocket by the home buyers. A competitive Buyer Agent Rebate is the only legitimate mechanism available to consumers to reduce this burden. Realtor Opcity scheme, by means of wire communications and price fixing with third parties, deprives consumers of this open market option in a deliberate and a malicious effort to earn massive kickbacks from hundreds of thousands of real estate transactions completed in all 50 US states and Washington DC.

Who are the major competitors that sell the product or provide the service?

There are approximately 2,000,000 real estate professionals in the United States that aim to provide a great service for consumers buying or selling approximately 6,000,000 homes each year. Real estate brokers must and, generally, are eager to compete with each for the service to represent consumers. It is not an occupation of a licensed real estate broker to promote other brokers, or to allocate consumers among brokers, or to collude with other brokers on commissions. It is certainly not appropriate for a licensed real estate broker to set service levels, commissions, and rebates for other brokers.

Who is harmed by the alleged violations? How are they harmed?

Realtor.com ReadyConnect (Opcity) antitrust and consumer protection violations are not harmless. Real estate brokers who attempt to compete for consumers on fair terms are at a massive disadvantage in this environment. As a result of broker-to-broker collusion, consumers end up getting steered toward a limited pool of agents and overpay for commissions. Consumers’ private transaction information is always shared with a referring broker that requires it to be disclosed to calculate the referral fees to be paid at the close of each transaction.

As long as referring broker market and consumer allocation schemes are allowed to operate, brokers looking to represent consumers are naturally encouraged to participate in the scheme. “There are no upfront costs, only pay us once the transaction closes,” is an attractive proposition to a broker who acts on this proposition by simply increasing a quoted commission to any consumer who comes as a referral. Any broker who chooses not to participate in such schemes risks to lose “free business.” Such an environment is highly poisonous to a healthy real estate market.

Consumers, of course, pay for this abuse with higher costs of commissions that eventually make it directly into their mortgages.

If you have a question or comment about an antitrust issue, you may submit it to the Bureau of Competition at the United States Federal Trade Commission and/or to the Antitrust Division of the United States Department of Justice Potential violations of federal consumer protection financial laws, including RESPA, can be reported to the Office of Enforcement of the United States Consumer Financial Protection Bureau.