updated 9/8/2005 1:54:00 PM ET 2005-09-08T17:54:00

The Justice Department sued the National Association of Realtors on Thursday, claiming it unfairly limits competition by allowing real estate agents to withhold home listings from Internet-based brokers.

The antitrust lawsuit, filed in U.S. District Court in Chicago, follows lengthy negotiations in which the government pressed the Realtors to drop restrictions designed to protect traditional brokers.

The association announced changes to its original plan Thursday, but the new steps were insufficient to ward off the lawsuit because the organization kept in place brokers' ability to discriminate against competitors who post listings online, said J. Bruce McDonald, deputy assistant attorney general in the Antitrust Division.

Internet brokerages operate in the top dozen real estate markets in the country and their numbers are growing, Justice officials said at a news conference to announce the lawsuit. The online brokers often charge lower fees and allow consumers to review listings at their own pace.

The Realtors' policy prevents brokers who rely on the Internet from being able to show customers all the houses that may be for sale in the locations and price ranges they're seeking, McDonald said. It "allows a broker to target his Web-based competitors," McDonald said.

The association said its new policy took into account Justice Department concerns. Initially, listing agents were allowed to withhold available homes from specific Web sites. The revised policy says that, when an agent chooses, listings will not be displayed on any Web site.

"The policy does not discriminate against any brokerage model, including discount brokers," said Al Mansell, president of the Realtors' association.

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