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Compass Faces ‘Uphill Battle’ in Zillow Lawsuit, Say Legal Experts

The impact of the high-profile litigation is likely to transcend whatever happens in the courtroom, as both sides seek to influence the industry.

Home Agents
By Liz Dominguez
July 10, 2025
Reading Time: 6 mins read
1
Compass

Compass’ recent lawsuit against Zillow has further muddied the waters after a torrent of legal challenges has rocked the real estate industry in recent years.

While the latest skirmish could redefine how real estate law, MLS policy and consumer access to home listings evolve, industry attorneys say Compass faces an “uphill battle” to prove that its claims against the listing portal hold merit. 

What Compass needs to bolster its case

Compass’ litigation maintains that Zillow is engaging in antitrust behavior by using its monopoly power to corral big-name brokerages such as eXp and Redfin into a conspiracy against certain private listings—specifically, properties marketed on alternative platforms or through “private” networks, but withheld from the MLS. The brokerage also claims that the Zillow policy has already caused “dips” in consumers’ use of its private listings.

Catch up on the latest between Compass and Zillow

“The evidence that Zillow’s actions impacted Compass’ efforts does not alone indicate anticompetitive behavior,” said Mitchell A. Skinner, attorney at Larson Skinner who has significant legal experience in the real estate space, including as counsel for the Real Estate Standards Organization (RESO) and the Council of Multiple Listing Services (CMLS). 

It’s not the business impact from competition that would make Zillow’s new policy illegal, but rather, exclusionary conduct that harmed competition itself and not just a rival, Skinner emphasized. 

Wayne Bell, co-founder and chief advocacy officer and general counsel, Real Estate Advocacy Alliance, doubled down on this, stating that the dip in consumer interest isn’t enough proof to support the anticompetition claim.

For Compass’ claims for relief, conspiracy and restraint of trade in violation of Sherman Act Section 1, the company has to show that there was a “contract, combination or conspiracy” to meet its burdens, per Skinner. 

Compass must prove that Zillow did not act alone, demonstrating a “meeting of the minds” or a “commitment to a common scheme” between the alleged conspirators, even if the understanding was not explicitly stated, added Bell.

“Not only that, assuming this would be analyzed under a rule of reason analysis, which is likely, Compass would generally need to show that the ‘contract, combination or conspiracy’ of Zillow and its alleged co-conspirators had anticompetitive effects,” said Skinner.

Regarding the assertion that Zillow operates as a monopoly, Skinner added that Compass would need to prove the portal has enough share that it can control price or exclude competition in an affected market while engaging in “the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen or historic accident,” as stated in a significant precedent-setting antitrust case, U.S. v. Grinnell Corp.

In its lawsuit, Compass spent significant time focusing on Zillow’s market power, citing financial analysts and Zillow’s own statements regarding its reach with consumers. Zillow would not have attempted to enact the new restrictions on private listings, Compass argued, if it didn’t have this monopoly power, because brokerages would simply flee to other platforms if they had alternatives.

“Like fishermen who go where the fish are swimming, home sellers need the option to list their properties on sites where the homebuyers are searching—and an inordinate number of them are searching on Zillow,” Compass wrote.

Addressing the pocket listing controversy

At the heart of this case is a contradiction, according to Douglas R. Miller, attorney at Miller Law PLLC and executive director at Consumer Advocates in American Real Estate. Miller, a fierce critic of traditional real estate practices, has generally characterized Zillow’s new listing standards as pro-consumer (though he also recently referred to the company’s referral fees and usage of in-house ancillary services as “abominable”).  

Compass, he said, looks to use the antitrust laws to shield a strategy that itself limits access, choice and transparency. This is in regard to Compass’ approach of withholding select listings from the public in order to market them internally for private gain. 

“That is a hard argument to win,” said Miller, adding that if Compass wants to show a horizontal agreement, they’ll need “smoking-gun” evidence—something he does not believe they have.

The larger potential issue, according to Miller, is the “gaping loophole” in the National Association of Realtors®’ (NAR) Clear Cooperation Policy (CCP) that allows so-called “office exclusives”—listings that are marketed within a single brokerage, but are not available on the MLS. This exception was cited extensively by private listing startups who sued NAR after CCP was adopted in 2020, claiming that the policy was only intended to eliminate competition, rather than promote transparency. 

“Instead of outlawing pocket listings, CCP legitimized and institutionalized them, giving brokerages a roadmap to limit public exposure while remaining technically compliant,” he added. “It created a shield for brokers who wanted to market listings internally for self-enrichment, not client benefit. In doing so, CCP became the launchpad for exploitative systems like private network listings.”

Notably, Zillow so far appears unconcerned with listings held privately in MLSs—which are not visible to consumers—either through previously existing internal systems, or MLSs that adopt NAR’s new optional “delayed marketing” policy. In its lawsuit, however, Compass claimed that Zillow CFO Jeremy Hofmann told Compass CEO Robert Reffkin that the company “will not allow that to happen,” when asked about private networks within an MLS.

In Miller’s opinion, Compass’ lawsuit is an example of a brokerage exploiting a broken system and then crying foul when others refuse to cooperate in the exploitation.

According to a Compass spokesperson, Compass agents have received warnings for listings that were in fact, on the MLS (as a “coming soon” or similar designation). Specifically, listings that are both on Compass’ “Coming Soon” platform as well as on the MLS (but not on Zillow) have received violations, the spokesperson claimed.

The spokesperson added that the company has so far not received violations for listings marketed on social media, for signs in yards or other types of public marketing.

CCP in the News: Pocket Listing Startup Refiles Antitrust Lawsuit Against NAR

What to keep an eye on

Bell suggests keeping a close watch on another MLS-related lawsuit being pursued by Compass: the case of Compass vs. Northwest Multiple Listing Service (NWMLS). It’s an antitrust lawsuit filed by Compass against the NWMLS in the U.S. District Court for the Western District of Washington.  

“The claims in that case are similar to those in Compass v. Zillow in that Compass alleges that NWMLS engages in anticompetitive practices, violating the Sherman Act. Compass’ lawsuit specifically targets NWMLS’ rules regarding listing practices, particularly its limitations on pre-marketing and office-exclusive listings.”

Learn more: NWMLS Accuses Compass of Demanding ‘Free Riding’ in Lawsuit Response

The potential ripple effects of the lawsuit

The stakes are high on either side. Skinner’s perspective is that both Compass and Zillow may be weakening the pro-competitive consumer benefits of MLSs.

“Compass appears focused on limiting access to its sellers’ listings while still benefiting from other brokers’ listings—a strategy that raises free-riding concerns,” said Skinner. “Zillow presents its approach as pro-consumer, but its efforts align with shareholder interests; listing access is essential for Zillow to drive its revenue derived from agents and brokers.”

The broader danger lies in Compass winning the case, according to Miller. A favorable ruling could “embolden firms to further fragment listing access, erode the public utility of the MLS and normalize practices that primarily serve broker profits at the expense of consumers.”

In the short term, however, Miller said it’s unlikely the lawsuit will set a binding legal precedent that reshapes the MLS system or NAR policies. This is because Compass’ claims are grounded in antitrust law, which requires high evidentiary thresholds. 

“Unless Compass is able to uncover and present concrete evidence of a conspiracy, particularly among competitors, the case may not survive summary judgment,” Miller said. “Without that, there is no path to an injunction or major court-mandated policy change.”

Regardless, due to its high-profile nature, Miller said that even if the Compass lawsuit fails, it draws public attention to what he feels are the anti-consumer practices of pocket listings and could provide a window into a deeper structural conflict over the future of real estate transparency and consumer protection. 

Where’s the focus on the consumer?

While both companies assert their actions are centered on consumer protection and choice, Bell hasn’t seen evidence that either Zillow or Compass has met with real estate consumer advocates, conducted consumer surveys or sought any type of independent expert opinions to support those claims. 

“Based on my reading and many discussions with real estate consumers, I do not think that most consumers are aware of the decisions made by either company regarding listings. Nor did consumers ask for the choices made,” said Bell.

It begs the question, “How many buyers want an expansion of private listings which put listings out of easy sight?” he asked. “The simple reality is that home listings which are marketed to a select group exclude the open market from seeing and selling those properties.”

Editor’s note: this story was updated at 2:42 p.m. eastern time with information from a Compass spokesperson.

Correction: an earlier version of this story incorrectly described Mitchell Skinner’s role with RESO and CMLS.

Tags: CompassCompass v. ZillowFeatureLawsuitMLSmls policyMLSNewsFeedMLSSpotlightPrivate ListingsPrivate Listings BanReal Estate LawsuitsReal Estate PortalsZillow
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Liz Dominguez

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