It’s All About “Control”: The New IDX Policy Proposal

Business and travel have really kept me away from the blog, but… since I have a few days at home, I did want to write about the new IDX Policy that will be proposed at NAR Anaheim next month. I’ve managed to obtain a copy of the proposal through my sources (thank you guys, you know who you are!) and… there be some interesting things in it.

The big news, as many have already heard, is that the Franchise IDX policy will be repealed in its entirety. The overall thrust of the proposal appears to be one aimed at restoring the status quo ante. But the way the proposal goes about it is… interesting. Let’s dive in.

The Amended IDX Policy

First, here’s the relevant language amending Multiple Listing Service Policy 7.58 (IDX Policy):

The IDX policy gives MLS participants the ability to authorize electronic display of their listings by other participants.

Associations of REALTORS® and their multiple listing services must enable MLS participants to display on participants’ public websites aggregated MLS listing information subject to the requirements of state law, regulation, and applicable MLS rules by electronic meansElectronic display subject to this policy includes display on participants’ public websites, displays controlled by participants on other websites, display on social media sites used by participants, RSS subscription, and applications for mobile devices. All electronic display of IDX information conducted pursuant to this policy must comply with state law and regulations, and MLS rules. Any display of IDX information must be controlled by the participant, including the ability to comply with this policy and applicable MLS rules.  (Emphasis mine)

The strike-through deletes existing language, while the underlined portions are additions to the IDX Policy.

My first observation is that initial sentence: “The IDX policy gives MLS participants the ability to authorize electronic display of their listings by other participants.” It seems a clarification of the purpose of the IDX policy, and returning the focus squarely onto the “participant”. If you recall, this was one of the major objections of the anti-Franchise IDX group, that Franchises are not “MLS participants”. Maybe this sentence doesn’t mean much, but to me, it suggests that the MLS Policy generally will be slanted very much towards “participants” and their rights and privileges.

Here’s more language:

MLSs that allow persistent downloading of the MLS database by participants for display or distribution on the Internet or by other electronic means may require that participants’ websites and displays controlled by participants on others’ websites (1) utilize appropriate security protection, such as firewalls, provided that any security obligations imposed on participants may not be greater than those employed concurrently by the MLS, and/or (2) maintain an audit trail of consumer activity on the IDX site participants’ websites and on others’ websites where displays are controlled by participants and make that information available to the MLS if the MLS has reason to believe that a participant’s IDX website or other website where displays are controlled by the participant has caused or permitted a breach in the security of the data or a violation of MLS rules related to use by consumers.  This policy does not require associations or MLSs to establish publicly accessible sites displaying participants’ listings.

Once again, note the added language: “…where displays are controlled by the participant”.

The obvious question that arises, of course, is “What does control mean?”

It’s All About Control

As Janet Jackson says in the video above, it’s all about control. What does it mean for a participant to “control” the displays?

First, it seems more or less obvious that the MLS Policy does not mean some sort of a legal definition of “control”: “the power to direct, manage, oversee and/or restrict the affairs, business or assets of a person or entity.”

Deconstructing the language above, we get something like this:

  • MLS must allow participants to display IDX listings electronically.
  • Participant (broker/agent) website
  • Other websites where participant has “control” over the display
  • Social media websites (probably means FaceBook and Twitter?)
  • RSS feeds
  • Mobile applications

But overriding all of those is that the participant must have control over “any displays of IDX information”.

Practically speaking, then, the new IDX policy opens up IDX to every conceivable “electronic” display. (I suppose if someone figures out how to use DNA sequencing to advertise listings, that would be “biological” instead of “electronic” and may be outside of this policy. Heh.) There’s specific language elsewhere in the IDX Policy allowing for Twitter or Text messages (fewer than 200 characters) as long as those have a link to an IDX-compliant display mechanism. But that openness is coupled to this new concept of “participant control” over any display of IDX information.

As a threshold analytical matter, any definition of control has to include the ability to prohibit. If you can’t get someone to stop doing something, you have zero control. So we can take it as a given that “control” by the participant means at the very least the ability to get the website/mobile app/Facebook or whatever to take down the IDX information on demand.

Question is, is that enough to establish “control”?

Let’s say that some company sets up a website on which they display IDX listings, on behalf of a local broker. Said company pays for itself by surrounding the IDX search/display pages with all kinds of advertising, including advertising for discount Viagra and adult escort services. The broker/agent is given only the choice of “you can take down your listings if you wish”, but no say in what ads will appear around the IDX information. Is that adequate control within the meaning of the Policy?

Or take a more mundane hypothetical: Could a broker/agent demand that only some of the IDX listings be displayed on a mobile app. If that is refused, so the participant’s choice is either provide all of the listings in the IDX feed, or none of it, is that “control”?

Is there any sort of a timing consideration? Broker requests that the IDX information be refreshed, and the “other website” takes six months to refresh it. In theory, the participant has “control” since he can direct the other website to do XYZ or stop doing XYZ… but in reality, the six month gap between making the request and having it realized is problematic. So assuming that there has to be some sort of a reasonable relationship between the request being made and the request being fulfilled… what is that relationship? Within the month? Within the week? Within the day?

Is it control if the participant has to make the request to changes in the IDX display via notarized letter in triplicate? Or does “control” mean that the participant has to have some sort of an administrative panel within the application/website?

Is it control if the participant simply delegates all of his oversight responsibility to a third party, since the participant could withdraw that grant of authority at any time?

Given the sensitivity of all parties to the issue of IDX display, I don’t think it’s enough to just put in language about “controlled by participant” and imagine that will lead to any questions being settled. Control isn’t one of those things that “you know it when you see it”. Without far clearer definitions of what is meant by “control”, I suspect that we will find ourselves at Midyear 2012 having all sorts of debates about what the heck “control” means.

Kind of An Aside, But…

All of the above makes me wonder… just what percentage of the Directors of NAR, who will be voting on this proposal on Monday in Anaheim, understand the issue? How many will have studied the issue? How many will have thought about it at all?

Could someone explain to me how hundreds of NAR Directors are not in violation of their fiduciary duty as a director of nonprofit organization?

Your thoughts, critiques, questions, and catcalls are, as always, welcome.


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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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