Zillow and the National Association of REALTORS® (NAR) legal battle with REX has resurfaced after a U.S. District Court judge denied calls to dismiss the latter’s antitrust lawsuit case.
In a September 3 ruling, Judge Thomas Zilly denied NAR and Zillow’s motions to dismiss REX’s lawsuit alleging that the online marketplace gives preferential treatment to NAR broker listings.
“Although NAR argues that Plaintiff lacks constitutional standing, and suggests that Plaintiff also lacks standing to bring an antitrust action … the Court concludes that Plaintiff has adequately pleaded that it has suffered harm as a result of the anti-competitive aspects of Defendants’ actions,” said Zilly in the case file.
Despite the turn of events, representatives from Zillow and NAR have maintained that the allegations are meritless.
“As MLS participants, we are required to abide by the MLS rules and regulations,” said a Zillow spokesperson. “As the proceedings move forward, we will continue to vigorously defend ourselves and our efforts to empower consumers with the most complete, up-to-date housing and listing information possible.”
NAR echoed similar sentiments, noting that the recent decision, while disappointing, hasn’t shaken their confidence that they will prevail in court.
“NAR remains committed to defending local broker organizations that create highly competitive markets, empower small businesses and ensure equitable homeownership opportunities, superior customer service, and greater cost options for all buyers and sellers,” said Mantill Williams, NAR VP of communications.
The recent court ruling comes months after Zilly sided with Zillow and NAR and ruled that REX hadn’t supported its claims that there is any deception injuring a substantial portion of the purchasing public.
The latest ruling file seemingly backtracks Zilly’s June 9 claims.
“At times, the complaint appears to allege that Zillow’s mere act of entering agreements with MLSs constitutes ‘horizontal agreements between competitors,'” read an excerpt from the case file.
According to Zilly, such acts would be insufficient to plead an anti-competitive agreement or conspiracy on their own. However, REX’s complaint also alleges that Zillow’s website redesign enforces an allegedly misleading labeling system that supports REX’s claims.
The issue initially stemmed from Zillow’s decision to transition from a real estate search portal into a buying-and-selling entity a year ago. Part of the shift included Zillow joining Multiple Listing Services and gathering listing data from the service’s IDX feeds.
When Zillow unveiled its revamped website layout in January 2021 to comply with the NAR and MLS guidelines, the new display created page tabs for “Agent Listings” and “Other Listings.”
REX initially filed its federal antitrust lawsuit in March 2021 against Zillow and NAR, claiming Zillow’s redesigned website strives to “segregate, conceal and demote” listings that aren’t from the MLS, putting REX at a disadvantage and potentially harming their business.
REX CEO Jack Ryan touted the recent decision as a self-proclaimed victory in an industry-wide press release, once again enlisting the incendiary term “cartel” to describe the existing organized real estate model.
“REX is the only real estate industry player willing to fight for consumers in courts of law and public opinion against the cartel that is driving up residential real estate fees, making homeownership so expensive, and making the home buying and selling process difficult and obscure,” Ryan said.
In previous filings, the court directed REX to stop referring to NAR and Zillow as a “cartel,” noting that that the term “is neither persuasive nor remotely accurate.”
Jordan Grice is RISMedia’s associate content editor. Email him your real estate news to firstname.lastname@example.org.