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Fight Brewing Over Push to Stop Online Piracy

Proposed federal legislation is designed to protect electronic database products like Realtor listings.

August 20, 2000|DAN GORDON | SPECIAL TO THE TIMES

In Hawaii last year, a real estate broker imported home listings from a competing broker's Web site onto his own home page.

Though some experts argue that this might give the broker whose listing was pirated more exposure for his client's property, the National Assn. of Realtors sees it differently.

The 750,000-member trade group is so concerned about the piracy of home listings that it believes the government needs to legislate against such activity, sothat the association is using its political muscle to push for a new federal law, the Collections of information anti-piracy act.

Among the most hotly debated issues in Congress, the bill is designed to protect electronic database products like Realtor listings from unscrupulous competitors who, with a few mouse clicks, can take the information and recast it as their own.

Concerned about the illegitimate copying and redistribution of online real estate listings, the association has made passage its top legislative priority. Its allies include organized medicine, book and newspaper publishers, stock exchanges and EBay.

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But opponents--online stock brokerages, universities and research libraries, Amazon.com and Yahoo, to name a few--assert that the bill is overly restrictive, extending established copyright law by granting ownership to facts.

They argue that the proposed law would lock in the dominance of the largest players in particular markets and stifle legitimate reuse of the information.

Some in the real estate industry wonder whether the association is merely trying to stop a few rogue agents or instead attempting to use public policy to protect its online listing franchise and its $250-million investment in Homestore.com, which has a lock on the nation's resale home listings.

"Everyone's kind of sitting back and saying, 'Gosh, this is a major push by [association], and it's really unclear as to why,' " said John Giaimo, president and chief operating officer of HomeSeekers.com, one of the largest national online listing sites and a Homestore.com competitor.

Critics of the association-sponsored bill have rallied around a competing bill, the Consumer and Investor Access to Information Act, which would reinforce existing copyright law.

The bill would enable competitors to glean information from someone else's database as long as the gleaner puts his own creative stamp on the new product and as long as wholesale copying is not involved.

That bill has passed the House Commerce Committee, where it has collided with the Realtors' version, which passed the House Judiciary Committee. The bills have been stalled for months as the two committees seek to work out the differences.

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The issue strikes at the heart of the residential real estate industry, affecting everything from commissions to the increasingly intense battle over where properties are listed online.

And there is a staggering amount of money at stake.

In 1999, some 5.2 million resale homes were sold in the United States, at an average price of $168,300, according to the association.

That would make the residential realty industry worth $875 billion last year. Figuring a negotiable commission of 6%, that is $52.5 billion in commissions to Realtors involved in the transactions.

The association argues that "pirates" are taking multiple listing data collected by legitimate online real estate Web sites, repackaging it and posting it as their own, whether it's to sell advertising, demand referral fees from listing agents if they secure a buyer or both.

"If information about listings is taken out of a Realtor's file drawer when he's gone at night, that's theft," said Lee Verstandig, senior vice president for the Realtors association.

"When a Realtor puts information he's developed for a new listing on the Web and it's stolen, it's no different, and he should be protected," he said.

In the Hawaii incident, a broker reportedly imported listings from another broker's Web site to his own. In the "remarks" section on some of the properties, the non-listing agent would indicate that the seller was under distress and willing to entertain low offers.

"Imagine the seller cruising the Internet and seeing that information," said John Riley, a real estate attorney and a vice president of InternetCrusade.com, which provides technology solutions for realty agents and is a leading creator of online communities for the real estate industry.

"On the one hand, it's in the sellers' interest to have as much exposure as possible for their property. But you have potential for manipulation," Riley said.

Realtors are bound by state laws and regulations as well as the ethical codes of their profession. As the legislation's supporters point out, information in the hands of individuals or groups with no such obligation can produce unwanted consequences, such as solicitations for ancillary services.

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