We’re just about a week away from the annual NAR meeting in Anaheim and that means IDX is once again a hot topic.  You may recall IDX was a hot topic last May during the mid-year meetings, and the same topics are being re-hashed again ahead of the meetings next week. Specifically, the issues are:

1.  Should franchises be allowed to use IDX the same as participants?

General consensus: No.

2.  Should the IDX policy be adopted to new technologies like social networks, RSS, and mobile applications?

General consensus: No, no and yes.

I’m pretty sure the franchise IDX issue has been exhausted and is no longer very controversial, so I’ll leave that alone.  My primary interest in this post is in the second question, regarding whether IDX can be adopted to new technologies.

First, I will state what I see as the basic purpose of IDX: To allow broker participants to provide consumers with IDX listings from the MLS for their non-commercial personal use. I may be wrong about this basic purpose, but let’s just assume that I’m right for a moment as we analyze the controversies present in the revised policy.

Interestingly enough, no one argues that IDX should be banned on mobile applications, even though those clearly are not “web sites” as outlined in the IDX policy.  Leaving that gaping hole aside for a moment, however, let’s turn just to the questions raised by social networks and RSS feeds.  There are many reasonable objections that display of IDX listings in social networks and RSS feeds are dangerous and, therefore, need to be excluded from IDX.  The arguments go something like this:

  1. Social networks are beyond the control of the participant;
  2. RSS makes it easier for bad hats to steal the IDX data;
  3. Complying with the current IDX rules regarding disclaimers, copyright statements, etc., is more difficult on social networks and RSS feeds; and
  4. All of the above creates a compliance nightmare for the MLS.

For sake of argument, let’s assume all of the above to be true.  Even if true, my contention is that the same arguments are equally applicable to “web sites” and other technologies already commonly used today in connection with IDX data.

At the most basic level, a “web site” (the currently defined method for displaying IDX) is an HTML page available to the entire world over the “world wide web”.  Let’s repeat and rephrase: Allowing IDX data on world wide “web sites” makes the data as open and accessible as it can be. Any other method, including RSS and social networks, provides much more limited exposure.

Web sites, open to the whole world, can be crawled, scraped, and framed by thieves just as easily RSS feeds.  Even if the thieves don’t have programming skills themselves, paying a programmer in China or India a few dollars to scrape your web site is no big deal, it’s just a cost of doing business. Further, if you can deploy anti-scraping technologies on a web site, you also can deploy those on an RSS feed.  Lastly, every IDX web site I’ve seen allows customers to sign up for email updates, which can be identical to RSS (e.g., the email may contain IDX data such as address, price, beds, baths, etc., or the RSS feed may only contain a link to the listings on the web site).  In either case, there is no real difference between RSS and email updates and the purpose is exactly the same, namely to remind site visitors to come back and visit your site for their non-commercial personal use.  The bottom line is that the current IDX policy allows display of the data to the whole world along with updates by email, and these technologies are very challenging to monitor.

Similarly, the idea that social networks are harder to police for MLSs than web sites or mobile applications is specious.  There can be an unlimited number of web sites whereas the number of social networking pages is much more likely to be limited to the number of members in your MLS given that sites such as Facebook or Google+ try pretty hard to make sure that the people on their sites are real people.  No matter what, however, the number of Facebook, Google+, Twitter or whatever other sites arise in popularity cannot be more than unlimited, which is the current compliance problem MLSs face from web sites alone.  In other words, the compliance issue for MLSs is no greater from social networks than it is for web sites, because the number is unlimited in any event.

I’m hopeful that what I’ve said above is relatively non-controversial, but I’d like to summarize it to try to make sure of that.  First, IDX currently allows display of IDX listings on an unlimited number of “web sites” (and in email and mobile applications).  Second, display on web sites makes the data available to anyone in the whole world.  Third, such wide open access to the data makes compliance very challenging.  In other words, regardless of new technologies like RSS feeds and social networks, IDX compliance is a big challenge.

Now, let’s evaluate a potential solution that reduces the need for compliance by MLSs, focuses compliance where it should be on brokers and agents deploying the data, and creates a mechanism and incentive for everyone to amp up their compliance game, while also allowing for technological innovation without heartache and endless PAGs every few years.

The basic solution is to get away from thinking about IDX in terms of MLS policy and instead shift the discussion toward creation and enforcement of license agreements for the IDX data.  Many MLSs already have a strong set of license agreements pertaining to the IDX data and my basic argument is that as long as the license agreements are enforceable and enforced, all the questions regarding who is in control, who is responsible, and what can be done with the data should be answered without the need for an MLS policy on IDX.

The license agreements should cover every relationship in the chain:

  1. From the broker participant to the MLS;
  2. From the MLS to other broker participants (and their developers); and
  3. From broker participants to consumers of the data for non-commercial personal use only.

Each of these license agreements should have compliance, enforcement and remedy provisions in them and such provisions should be extended to every other party in the chain, including the right to audit, terminate the license on violation, and sue for damages, including liquidated damages as a penalty for violations.

Let’s assume that these license agreements are all in place, and everyone in the chain is comfortable with the provisions.  Does it really matter whether the consumer gets the data for their non-commercial personal use via RSS feed, Facebook, mobile application, email, snail mail, or in person? Is it not the case that the only thing that really matters are the terms of the license agreement for each party in the chain and that the agreements are enforced properly (and aggressively)?  Isn’t the question of “control” answered by whether or not the broker has a proper and enforceable license agreement in place?  Isn’t this approach of focusing on the terms of the license agreement for each link in the chain much easier to understand than the nuanced language tweaking required to try to anticipate future technology?

The reality is that we cannot know what new technology will be invented tomorrow, but I’m hopeful that most everyone agrees that brokers getting IDX data in the hands of consumers so they can buy houses is a good thing, regardless of the technology used.  If we focus attention on crafting license agreements that allow that and restrict any other uses, the many thorny questions surrounding IDX may just go away.

 

 

 

 

4 Responses to The focus for IDX should be the license agreement, not MLS policy.

  1. Jay Thompson says:

    “Does it really matter whether the consumer gets the data for their non-commercial personal use via RSS feed, Facebook, mobile application, email, snail mail, or in person?”

    No, it doesn’t.

    But you knew that.

    Great piece Michael, with solid reasoning and arguments. I’ve never understood the, “But RSS can be scraped and abused by the evil people!” argument.

    Any web page can be copied and pasted. And while *I* can’t personally do it, I know anyone with a modicum of programming skills can write a script (or whatever) to crawl a site/source code and extract whatever they want.

    Unless we go back to hardcopy MLS printouts stuffed in a three-ring binder and locked in the broker’s desk, the data is out there for the evil to take.

    It should be an interesting meeting at Annual…

  2. Excellent insight Micheal

    I share your opinion that EULA may be a possible approach to solving this issue.

    Should NAR provide model EULAs? Or would that merely take on the “horse of a different color” in terms of an IDX policy?

    Leaving the drafting of EULAs up to the locals may create a level of comfort with respect to anti trust that NAR may not feel is acceptable. If I am correct the IDX policy was in part created to ensure the locals are not creating rules which inhibit innovative broker business models.

    It seems to me the policy, as written, leaves some things to be desired in terms of addressing emerging technologies, but is keeping the DOJ at bay.

    How would the current policy or EULA, with respect to the sellers option to not allow comments, be addressed in a social media environment? Social media is conversational by nature and posts on Facebook or tweets can be subject to commentary which a seller may wish to prohibit.

    The meeting annual will undoubtably be a “interesting” one, look forward to seeing you & your team.

    See you next week.

  3. Michael Wurzer says:

    Peter, I’ll leave the anti-trust issues to others but will note that those concerns seem to be basically the same with either approach. Regarding the “no comments” issue, they could prohibit it in the terms of use as a technical matter but that seems impractical. For example, have you seen an IDX system in the market today that doesn’t allow visitors to share listings to their friends or family on Facebook, etc. Do sellers or brokers really want to prohbibit that? If so, they should not post their listing to the web at all.

  4. Good piece Michaeal. You are right on that no matter how MLS data is displayed it is just about impossible to enforce the myriad of rules that we have. Why do we think that 3rd parties have the ability to out-innovate us. They don’t – but they are immune from all the laws, rules and regulations that we are forced to work under. During the CMLS conference call the other day on this topic I heard suggestions to add more levels of enforcement to the MLS plate – we can’t police it now, how would adding more duties to our already overflowing cup help anyone?

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