Zillow Must Face Securities Suit Over Co-Marketing Program

Online real estate company Zillow failed to win the early dismissal of a securities lawsuit over its “co-marketing” program between lenders and real estate agents, a federal court ruled April 19.

Real estate agents pay to list properties on Zillow’s platforms. Zillow in 2013 launched a program allowing mortgage lenders to appear beside the agents in advertisements in exchange for a fixed monthly payment to Zillow that defrayed the agent’s advertising costs. Zillow also forwarded the agents’ customer leads from these postings to the lenders, the plaintiffs claim.

Because Zillow charged lenders more than fair market value for the advertising ...