They Were for Cartels before They Were against Them

by on November 30, 2006 · 8 comments

Joe at Techdirt makes an excellent point about government and monopolies:

Here’s a story that hits on some of today’s themes of monopolistic behavior and keeping stuff off the internet. The Department of Justice has been given the go ahead to proceed with a lawsuit against the National Association of Realtors, alleging that the group colluded to prevent listings from appearing online, in a bid to give established brokers an advantage. Now, we’d be tempted to say that however backwards the organization’s thinking is, they have the right to distribute their data to whomever they want. But we should take a step back and ask why the NAR is in the position to monopolize this information in the first place. That fault rests with the government, which has put the NAR in charge of regulating its industry, and deciding who can and can’t be a broker. In other words, its monopoly has official legal blessing. Without this, anyone could go out and get listings, and abide by whatever rules they wanted to, offerings to broker home sales as efficiently as possible. So instead of suing the NAR, for doing what it’s intended to do (maximize profits for its members) why not get at the root of the problem and take away its monopoly status?

Quite so. We just published an article by my colleague Sarah Brodsky describing how the realtors’ lobby recently got a euphemistically named “Homeowners’ Bill of Rights” passed in Missouri that limits competition by outlawing discount real estate brokers. If you want to pay someone to list your house but do the rest of the legwork of selling the house yourself, that’s too bad. You have to go with a full-service real estate agent.

The state has a split personality when it comes to monopolies and cartels. Most of the time, our elected officials vigorously denounce them and take action to (supposedly) increase competition. However, if they’re created by the government, that’s a whole other ball game. In that case, only crazy right-wingers would suggest that more competition would be beneficial. And sometimes, the state does both at the same time: creating a cartel with its right hand, while its left hand simultaneously investigates the cartel for being anti-competitive. It’s very strange.

  • http://www.blogger.com/profile/14019452 Steve R.

    It’s not really that strange, the government is not one entity. If it were, you could say that it suffers from a multiple personality disorder. I believe that many of our ridiculous laws are passed to appease special interest groups. Our elected officials seem to have lost the concept of serving in the public interest.

    The issue of public access to the MLS surfaced several years ago. On the radio, a realtor (of course) advocated that the public should not see the MLS listing because the realtors had this important role of “making the market”. Utter nonsense of course.

    Considering the current abominable state of copyright law, an innovative lawyer NAR may be able claim that this data is “intellectual property” and not subject to public disclosure as a means of sidestepping the monoply issue. The recent issue of “who owns the baseball statistics” raises the concept that data aggregators would be entitled to control the data even after it is released. Ironically, why aren’t data aggregators required to pay royalties to the data sources when the data is sold????
    http://www.nytimes.com/2006/05/16/sports/baseball/16license.html?ex=1305432000&en=2beb4a21f74a2f06&ei=5088&partner=rssnyt&emc=rss

  • http://www2.blogger.com/profile/14380731108416527657 Steve R.

    It’s not really that strange, the government is not one entity. If it were, you could say that it suffers from a multiple personality disorder. I believe that many of our ridiculous laws are passed to appease special interest groups. Our elected officials seem to have lost the concept of serving in the public interest.

    The issue of public access to the MLS surfaced several years ago. On the radio, a realtor (of course) advocated that the public should not see the MLS listing because the realtors had this important role of “making the market”. Utter nonsense of course.

    Considering the current abominable state of copyright law, an innovative lawyer NAR may be able claim that this data is “intellectual property” and not subject to public disclosure as a means of sidestepping the monoply issue. The recent issue of “who owns the baseball statistics” raises the concept that data aggregators would be entitled to control the data even after it is released. Ironically, why aren’t data aggregators required to pay royalties to the data sources when the data is sold????
    http://www.nytimes.com/2006/05/16/sports/baseba

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I see where this post is going. But recall your recent discussions with Jim Haper on the differences between real property and intellectual property. One of the important implications for policy discourse is to know which form of property you’re talking about, keeping in mind that often you’ll use examples from one kind to illustrate the other. Where this is most important relates to the term “monopoly.” Sure, you can say that monopolies are govt created, have effects on competition and cite other similarities between monopolies in real and intellectual property, but the economic similiarties are few (does monopoly reduce competition, does monopoly lead to suboptimal levels of innovation, how do you define the extent of a monopoly).

    On the other hand, if you don’t like things created by the govt, then perhaps you disagree with the patent case law handed to society by the CAFC, or the Defense Department’s DARPA wing which initiated a lot of basic research leading up to our modern Internet.

  • http://weblog.ipcentral.info/ Noel Le

    Tim, I see where this post is going. But recall your recent discussions with Jim Haper on the differences between real property and intellectual property. One of the important implications for policy discourse is to know which form of property you’re talking about, keeping in mind that often you’ll use examples from one kind to illustrate the other. Where this is most important relates to the term “monopoly.” Sure, you can say that monopolies are govt created, have effects on competition and cite other similarities between monopolies in real and intellectual property, but the economic similiarties are few (does monopoly reduce competition, does monopoly lead to suboptimal levels of innovation, how do you define the extent of a monopoly).

    On the other hand, if you don’t like things created by the govt, then perhaps you disagree with the patent case law handed to society by the CAFC, or the Defense Department’s DARPA wing which initiated a lot of basic research leading up to our modern Internet.

  • http://www.techliberation.com Tim Lee

    Noel, I don’t understand what you’re responding to here. I didn’t intend for this to be a post about patents or copyrights. I agree that they are are a special kind of monopoly that’s more defensible than garden-variety government monopolies like the post office.

  • http://www.techliberation.com Tim Lee

    Noel, I don’t understand what you’re responding to here. I didn’t intend for this to be a post about patents or copyrights. I agree that they are are a special kind of monopoly that’s more defensible than garden-variety government monopolies like the post office.

  • http://www.pff.org Noel Le

    I was mainly commenting on the phrase “monopolistic behaviour” used by TechDirt, but yes, youre right, I dId have a knee-Jerk reaction. Misuse of the term monopoly bothers me to no end.

  • http://www.pff.org Noel Le

    I was mainly commenting on the phrase “monopolistic behaviour” used by TechDirt, but yes, youre right, I dId have a knee-Jerk reaction. Misuse of the term monopoly bothers me to no end.

Previous post:

Next post: