This article explores the distinct difference between a tech-enabled online brokerages and a media services that operate in the United States residential online real estate sector, specifically, the difference between Compass brokerage and HomeOpenly marketplace.
Compass claims that it “is building the first modern real estate platform, pairing the industry’s top talent with technology to make the search and sell experience intelligent and seamless.” This is not true. Compass is building a residential real estate firm with a website.
In another word, Compass, Inc. is an American licensed real estate broker that utilizes the Internet as a marketing medium with the use of real estate technology. Compass employs more than 25,000 agents (working as independent contractors) who earn a percentage of the selling price and give a percentage of each commission to Compass, consistent with the traditional real estate brokerage business model.
Consistent with the traditional real estate brokerage business model remains a key sentence here.
HomeOpenly offers nothing traditional in online real estate.
HomeOpenly is a highly disruptive online platform and a savings aggregation mechanism designed to bring real estate sector into full transparency on fees and levels of services — also known as genuine open competition between Realtors.
HomeOpenly is a technology media company, nothing less, nothing more. HomeOpenly operates with inputs and outputs of data. This mode of operations is a hallmark of a genuine technology company. The reason for this is simple:
Technology companies deliver revenue from value-added data operations.
Real estate brokers deliver revenue from fees, aka real estate commissions.
These products are nothing alike. Real estate brokers utilize the Internet to promote fees in scale, while technology companies utilize Internet to offer data in scale.
Compass has recently served HomeOpenly not one, but two consecutive notices, with claims that HomeOpenly somehow has violated their trademarks:
HomeOpenly cannot possibly violate Compass trademarks simply because we operate in completely different spheres.
HomeOpenly is an innovative and young internet company that designs, builds, and maintains a series of online marketplace solutions with a focus on a home search, automated valuation modeling (AVM), homebuyer’s and seller’s representation services, mortgage origination, refinance, home insurance, renovation, design, staging, home inspections, home security, moving, home maintenance, title, escrow, cash offer stand-in programs, home warranty, and other real estate products and services.
In another word, HomeOpenly aggregates services and savings fulfilled by independent Realtors who choose to use the platform to advertise competitive savings.
Compass, on the other hand, provides real estate sales management; real estate brokerage; real estate consultation; real estate listing; real estate valuation services; providing real estate listings and real estate information via the internet; real estate title insurance underwriting services; real estate escrow services; real estate lending services; financing and loan services; mortgage lending, financing, planning, brokerage, and refinancing services; insurance services, namely, underwriting compensation, casualty, errors and omissions, liability, accident, and business insurance; real estate services, namely, real estate agency and acquisition services in the field of residential and commercial real estate; housing services, namely, real estate agency and acquisition services in the field of residential and commercial real estate; real estate agency and acquisition services in the field of residential and commercial real estate.
In another word, Compass is a licensed real estate broker, licensed to do business as Compass RE in Delaware, Idaho, New Jersey, Pennsylvania and Tennessee, Compass Real Estate in Washington, DC, Wyoming and Idaho, Compass Realty Group in Missouri and Kansas, and Compass South Carolina LLC in South Carolina. California License # 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467.
Any allegations of “unauthorized” use of Compass trademark by HomeOpenly are false. The use is authorized by the Compass agents who use the platform to promote their service. The location of the trademark is used to identify Compass agents’ services, not HomeOpenly.
HomeOpenly is a genuine online marketplace and we are allowed to properly identify services of independent Realtors, as such. There are a number of places on HomeOpenly platform where Compass trademarks are displayed, and, absolutely in all these cases, the displays are used to identify and promote select Compass agents.
Antitrust Claims by HomeOpenly vs Compass
Thousands of unethical Compass agents are currently in broker-to-broker collusion via referral fee schemes, some or all, as following:
Zillow Flex Program and Zillow 360
Realtor.com ReadyConnect (Opcity)
Opendoor Partner Agent Program
and similarly situated “shell” real estate brokerages.
This practice violates Federal Trade Commission Act of 1914, Sherman Antitrust Act of 1890, RESPA (12 U.S.C. 2607) Section 8, as well as fair advertising and state antitrust and consumer protection laws currently ratified and enforced in connection with broker-to-broker market allocation, consumer allocation, false advertising, unlawful kickbacks, wire fraud, and price-fixing practices.
Compass agents who participate in these hub-and-spoke collusion schemes do so to earn uncompetitive and overpriced commissions, harm consumers as a class, harm legitimate and honest Realtors as a class, and harm HomeOpenly platform as a result.
Compass brokerage itself admits that “actions by our agents are our actions” and as a licensed broker of record in these kickbacks-driven and price-fixed schemes, Compass brokerage unlawfully profits from broker-to-broker collusion.
The resolution to this dilemma is uncertain
Whenever a mega-rounds SoftBank puppet platform, such as Compass, sends two consecutive threats to a self-funded startup, the battle emerges of not just right vs wrong, but big vs small.
Compass, obviously, has resources to smash HomeOpenly with an unlawful SLAPP, force it to remove Compass agents from the platform so that none of them are able to compete for consumers with genuine savings.
However, this is exactly where antitrust laws come into play. Does Compass really fear HomeOpenly’s Open Marketplace(tm)? Yes, it does, because HomeOpenly is built on transparency, and not kickbacks. HomeOpenly is a legitimate technology services, unlike Compass.
Compass, on the other hand, has a big antitrust problem it cannot face, or even acknowledge — some Compass agents are in an open collusion with “shell” or “sham” paper brokers that unlawfully organize independent Realtors into networks in an effort to collect kickbacks from consumers’ real estate transactions.