Compass Sues Zillow as Fight Over Home Listings Heats Up (1)

Residential real estate brokerage Compass Inc. sued Zillow Group Inc., alleging that the home-search website is using “anticompetitive tactics” with its plan to restrict certain listings.

Compass alleges that Zillow “has retaliated against competitive threats by enacting an exclusionary policy” by banning listings that have been publicly marketed elsewhere first, according to the lawsuit filed Monday in federal court in Manhattan.

The move comes after months of back-and-forth between the companies over Compass’ push to encourage sellers to first market their homes to other agents at the firm. Zillow has argued that there should be transparency and has instituted a policy saying that, as of June 30, it will block certain listings that are publicly marketed for more than 24 hours before being posted to a local multiple listing service, or MLS.

“No one company should have the power to ban agents or listings simply because they don’t follow that company’s business model,” Compass Chief Executive Officer Robert Reffkin said in a statement.

A Zillow spokesperson called the lawsuit’s claims “unfounded” and said the firm would defend against them.

“At the heart of this issue is a simple principle: when a listing is publicly marketed, it should be accessible to all buyers — across all platforms, including Zillow,” the company said in an emailed statement. “Hiding listings creates a fragmented market, limits consumer choice and creates barriers to homeownership.”

Read More: Secret Real Estate Listings Ignite Fight Over How Homes Are Sold

The battle between the two industry heavyweights has ramped up in recent months. Compass, the largest US residential brokerage last year according to RealTrends, has been urging sellers to agree to launch the marketing process for their homes without immediately sending their listings to Zillow, including with an extended “coming soon” period.

The company argues that agents are able to test prices and build interest in their listings without having a third-party track any changes they make to their sales strategies — such as a price cut — as Zillow and other home-listing sites do.

But Zillow, which earns revenue by connecting potential buyers with agents, argues that everyone should have access to that real estate information. The company announced its new policy regarding listing access in April.

The major trade group for agents, National Association of Realtors, has had a policy for years called “clear cooperation,” which requires agents to formally list homes on their local MLS within 24 hours of starting any public marketing.

Redfin Corp. has also opposed the practice of publishing listings that have been publicly marketed elsewhere before being posted on the MLS. In the lawsuit, Compass alleged that Redfin and eXp Realty, which also has an online home search site, are “co-conspirators,” while not naming them as defendants.

A Redfin spokesperson declined to comment.

“The recent legal filing contains claims that are without merit as they relate to eXp,” Leo Pareja, eXp Realty’s CEO, said in a statement that called the implication of co-conspiracy “categorically false.”

The case is Compass Inc. v Zillow Inc., Zillow Group Inc. and Trulia LLC, 25-cv-05201, US District Court, Southern District of New York

(Updates with Zillow comment starting in fifth paragraph, and Redfin, eXp mentions in 11th paragraph.)

To contact the reporters on this story:
Jennifer Epstein in New York at jepstein32@bloomberg.net;
Patrick Clark in New York at pclark55@bloomberg.net

To contact the editors responsible for this story:
Katherine Chiglinsky at kchiglinsky@bloomberg.net

Craig Giammona

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