With a verdict that may or may not prove a bellwether for future (and current) lawsuits targeting the industry, a jury last Friday found in favor of Zillow in a high-profile case that was related, but not identical, to class action suits focused on agent commission structure and policy.
REX, an upstart discount commission online marketplace founded in 2014 that has since ceased operations, sued Zillow and Trulia, along with the National Association of REALTORS® (NAR), alleging that the portals conspired with NAR to disadvantage any listing not hosted on a traditional MLS. Zillow had moved REX listings to a separate tab with FSBOs on its website and apps to comply with an NAR rule.
Back in the summer, a judge removed NAR as a defendant in the case, saying that there was not enough evidence to show a conspiracy between NAR and the portals.
After a two-week trial, the jury was unconvinced that Zillow’s actions amounted to false advertising or violated consumer protection statutes. REX had argued that the tab that included its listings received much less traffic from consumers, even though REX listings were marketed by agents.
A Zillow spokesperson told RISMedia the company is “pleased with today’s victory” and that the company looked forward to “helping customers who come to Zillow get into their next home.”
An email sent to REX lawyers seeking comment was not immediately returned.
Zillow had argued in the case that there was no false advertising because the second tab, labeled “other,” did not explicitly describe listings as non-agent, even though the default tab was labeled “agent listings.”
As only one of many cases that has alleged anti-competitive practices by major players in the real estate industry, the verdict is likely only a small comfort for NAR, portals and major brokerages, who are facing stiffer challenges in courts from class action consumer lawsuits and a stalled federal investigation.
Additionally, another similar civil suit filed by a third-party listing service, ThePLS.com, is ongoing and names NAR and major MLSs as defendants. That case is not scheduled to go to trial until 2025.
Class action suits against NAR and major brokerages are also going to trial much sooner, with RE/MAX and Anywhere already choosing to settle those cases and pay out tens of millions. Plaintiffs in those suits, who are recent home sellers, are alleging that MLS and NAR policy inflate real estate commissions and violate antitrust statutes.
