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The Sherman Act Protects Competitors, the Ninth Circuit Reminds in Real Estate Case

Posted  May 10, 2022

By Harrison McAvoy

A recent decision from the United States Court of Appeals for the Ninth Circuit points out that the antitrust laws’ protections extend not just to end consumers, but to any person or business in a supply chain, and provides guidance to litigants on standards for pleading a per se group boycott under Section 1 of the Sherman Act.

In v. National Association of Realtors, the Ninth Circuit held first that, contrary to the lower court’s decision, a plaintiff need not be the end user of a particular product to establish standing under the antitrust laws. Rather, any business that purchases inputs for a particular product or service may be a “consumer,” and an antitrust plaintiff need not plead harm to the ultimate consumer to bring an action.

The court then held that plaintiff’s allegations of a Section 1 violation adequately alleged a group boycott based on the National Association of Realtor’s (“NAR”) Clear Cooperation Policy.  The policy requires that brokers participating in NAR-associated multiple listing services, or MLSs, submit any listing to the MLS that the broker is publicly marketing (or cease MLS participation)., which operated a listing network for sellers to privately market properties, alleged that the policy prevented it from attracting listings and thus foreclosed its ability to reach scale and compete with the MLS system in the market for real estate network services.

The Ninth Circuit reversed the lower court’s dismissal of’s complaint and held that its allegations pleaded a per se violation of the antitrust laws. As the court recognized, when dominant firms deprive a competitor of a critical input without plausible justification, such conduct is a per se violation. That outcome holds even if the competitor can still access the input but only on unfavorable terms.

The court held that the NAR’s policy as alleged met those standards. By forcing brokers to market listings in the MLS or risk access, the policy impaired’s ability to attract brokers and their listings, resulting in declining broker participation and preventing from challenging local MLSs. Notably, the court rejected on its face the NAR’s justification for the policy—that the restraint on network competition also improved the MLS product by consolidating most or all listings in one place—holding that justifications that assume product quality is enhanced from competitive restraint are an afront to the Sherman Act, which is based on the principle that competition produces the best outcomes from consumers.

Having found sufficient allegations of per se group boycott, the Ninth Circuit also held that the plaintiff had sufficiently alleged antitrust injury. According to’s allegations, by driving upstart competition from the market, the Clear Cooperation Policy left brokers—the consumers of real estate network services—with less choice, higher costs, and lower quality products. The court further held that the incomplete exclusion of from the market was of no consequence; the hampering of the plaintiff’s ability to compete and a reduction in plaintiff’s share of the market was sufficient to plead antitrust injury.

The Ninth Circuit’s decision is a reminder that businesses too are beneficiaries of the Sherman Act protections, not just the general consuming public, including when dominant firms deprive competitors of key inputs.


Written by Harrison McAvoy

Edited by Gary J. Malone