In a major escalation in its battle with Zillow, Compass filed for a preliminary injunction, along with a motion for expedited discovery, early Friday, seeking to block Zillow’s new rules partially banning private listings—just three days before the portal’s June 30 enforcement deadline of its new Listing Access Standards (LAS). According to the filing, Compass is already seeing a negative impact among clients, agents and investors due to the Zillow ban.
On June 24, Compass filed a federal antitrust lawsuit citing an alleged orchestrated conspiracy effort between Zillow and two other major brokerages: Redfin and eXp. According to the filing, this effort not only damages Compass’ marketing strategy but also points to a coordinated boycott that violates Sections 1 and 2 of the Sherman Antitrust Act.
Claiming Zillow’s LAS blocks agents from pre-marketing properties before sharing to the MLS, which feeds into Zillow, effectively makes it “nearly impossible for homeowners to sell their home off Zillow.”
With the lawsuit likely to be protracted, Compass is asking the judge to prevent the new rules from going into effect on Monday based on “the public interest” of protecting competition, and claims that “the balance of harms tip decidedly against Zillow,” with an injunction on the rule preserving the status quo.
“If the Zillow Ban is not enjoined, Compass will… lose its major competitive advantage, suffer serious harm to its reputation, and lose future business opportunities and clients,” the filing claims.
In a statement shared with RISMedia, a Zillow spokesperson continued to defend its new policy, repeating that it will “vigorously defend” against the “unfounded” allegations in court, without addressing specifics.
“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 spokesperson said.
At the center of Compass’ latest filing is Founder & CEO Robert Reffkin’s account of the alleged conspiracy. Reffkin claims, among other things, that a top-performing team already left Compass due to fears over the new Zillow policy. “Compass is already losing reputation, business opportunities, agents and home sellers because of the Zillow ban,” reads the filing.
The filing further claims that the ban will irreparably harm consumers “by the loss of competition through loss of choice and control,” spending significant time touting the positive attributes of Compass’ “3 Phase Marketing Strategy” (3PS) plan, which includes private listing services banned by the Zillow rule. According to the filing, Compass has witnessed a 23% drop in adoption of 3PS since the announcement of the Zillow ban.
The company also retreads many of the same allegations made in the initial lawsuit, including that Zillow has monopoly power in the market, and that it coordinated with competitors to ensure support of the new rules.
Reffkin also goes into more detail regarding a Zoom call he had with Zillow CFO Jeremy Hoffman, the day before Zillow announced the ban April 10.
During the call, Reffkin claims Zillow CFO Jeremy Hoffman offered to “double Compass’s market share” in exchange for Compass complying with Zillow’s new listing standards and abandoning its current marketing strategy.
“He acknowledged that stopping or curtailing the program would be a loss for Compass,” Reffkin said in his declaration. “In exchange, Mr. Hoffman claimed Zillow could potentially ‘double (Compass’s) market share’ through the prospective partnership.”
The following day, Zillow announced its listing ban, with eXp shortly issuing a joint press release with Zillow, announcing the partnership.
Following the announcement, Redfin CEO Glenn Kelman contacted Reffkin. During the call, he “pushed Compass to listen to Zillow, saying it is ‘not good when Zillow and Compass are warring’ and suggesting that Zillow or Redfin would reward Compass with premarketing options,” according to the court documents.
U.S. District Judge Jeannette A. Vargas ordered Zillow to respond to the motion by June 30 and for the parties to appear for a virtual conference with the court July 1. The parties were also ordered to submit a joint letter by June 30 outlining their agreement, or lack thereof.
