The majority of listings in the Chicago area disappeared from Zillow this morning, around eight hours after a midnight deadline set by local MLS Midwest Real Estate Data (MRED), marking a dramatic escalation in a bitter, high-stakes dispute over restrictions on “private listings” that is playing out nationwide.
A sharply-worded announcement from MRED that went out at around 10 a.m eastern time this morning blamed Zillow for the situation, claiming the portal “effectively decided not to display 99.98% of MRED’s listings because it, in its own judgment, disagrees with the lawful marketing strategy associated with the remaining 0.02% of listings.”
“Our rules apply equally to every participant, and we have a duty to educate our participants and vendors, counsel them when they are out of compliance, and require that breaches be cured,” said MRED CEO Rebecca Jensen in a statement.
Zillow was displaying around 5,000 listings in the Chicago area at press time, most still attributed to MRED. In a follow-up statement sent about 30 minutes after the initial announcement, Jensen said that “MRED previously provided to Zillow for display all its active and other listing data about homes,” but that after suspending Zillow’s access to that data, “(c)ontinued display of MRED’s listing data is in violation of Zillow’s license agreement and federal copyright law.”
In a statement, a Zillow spokesperson claimed that “Chicagoland home buyers and sellers this morning have far worse access to the housing market than they had yesterday,” accusing MRED of “prioritizing one megabrokerage’s profits.”
“MRED and Compass have colluded to turn back the clock on consumer transparency at the exact moment American families can least afford it, cutting off competition, hiding homes and engineering a market that extracts more from buyers and sellers so Compass can pocket more on every deal,” the spokesperson said.
With Compass standing at its side, MRED has resisted pressure from Zillow for almost a year over its internal private listing network, eventually announcing a formal partnership with Compass in April to take its platform nationwide. The MLS subsequently threatened to cut Zillow off from listing feeds, claiming the portal violated rules (that have recently been updated) by banning certain Compass properties from its platform.
Zillow has called this reasoning “pretextual,” and accused MRED of operating “under the influence of Compass.” The company said it will continue to ban properties that violate its “listing access standards,” focused on listings that “require a consumer to work with the listing brokerage to get access to the listing,” and characterized those policies as “pro-transparency.”
In a blog post yesterday, Zillow accused MRED and Compass of harming both consumers and agents in an attempt to control (and monetize) more transactions
“MRED is weaponizing its monopoly power over Chicago listings to protect one competitor’s interests at the expense of everyone else in the market. That is not what a neutral market infrastructure provider does. That is what a hijacked one does,” the company wrote.
MRED, on the other hand, has argued its stance is rooted in its own long-standing principles, having launched its private network a decade ago.
Zillow filed a lawsuit against MRED and Compass on May 12, alleging they had carried out an “illegal conspiracy” as competitors to undermine Zillow’s business in violation of federal antitrust standards. The portal also asked a judge to prevent MRED from cutting it off from listings.
Around a dozen listings that MRED has claimed Zillow banned in violation of the MLS’s policies—all by Compass or affiliated brands—were still not appearing on Zillow’s website Wednesday morning. MRED has said that if Zillow allows those listings back on its platform, it will no longer be in violation of the MLS’s rules.
At the same time, Zillow claimed in court that MRED CEO Rebecca Jensen told one of its executives back in January that she would “continue to change (MRED’s) rules as needed to prevent Zillow from implementing its Standards regardless of how Zillow adapted them.”
In a court filing yesterday, MRED told a federal judge in Illinois that Zillow can avoid any “harm” from disruption of listing agreements by “simply complying with the same clear and longstanding license agreements under which it has operated for years.” MRED also argued that Zillow’s lawsuit should be moved into arbitration, based on provisions of those license agreements.
“MRED grasped at a different straw: seeking to force this case into arbitration so it doesn’t have to defend its conspiracy in court,” the Zillow spokesperson said “This isn’t a disagreement over rules; it’s an antitrust case. MRED should have to answer for its illegal actions in a court of law.”
In its release, MRED said that its listings will still be “broadly distributed across thousands of consumer-facing websites.” Zillow’s licensees can continue to access MRED services to contribute listings and facilitate broker and home buyer transactions through MRED systems, the releases said, and promised that “at this time,” there would not be disruptions to Zillow-owned products like ShowingTime and dotloop.
“MRED appreciates your continued support as it remains committed to protecting the integrity of the cooperative marketplace,” the release said.
Proxy war
A source with knowledge of MRED’s decision-making said the first time MRED informed the portal that listing feeds would be cut off was less than ten days ago, roughly coinciding with when the lawsuit was filed. The source also said that MRED has communicated to each independent brokerage that they can make their own decisions on sending Zillow a direct feed for listings.
That MRED source said the specific rule that MRED says Zillow is violating—an MLS policy focused on “objective criteria” in how IDX feed recipients can display listings—was “clarified” recently by MRED, and alleged Zillow was filtering listings based on brokerage rather than property type, in violation of that rule.
MRED is not an NAR-affiliated MLS, and the source added that this interpretation of the rule is MRED’s, not NAR’s based on the rule’s origins in the 2000s era litigation with the Department of Justice, when MLSs often refused to share listings with internet-based brokerages.
That rule states that IDX feed recipients can only filter listings based on “objective criteria,” which NAR defines as “including but not limited to” factors like geography, property type or “type of listing.” MRED recently updated that rule to say that “(e)xclusion criteria may not include, directly or indirectly, the identity of any Participant, brokerage firm, subscriber, licensee, or representative.”
According to Zillow, an MRED employee told the portal that a “policy or display approach that limits or suppresses listings from certain brokerages would be inconsistent with the revised MRED rules,” seemingly referring to bans of Compass private listings.
According to Zillow, Compass has lobbied other MLSs to “enforce” that same rule to block Zillow from implementing its standards. The portal filed an email exchange between Compass Head of Industry Relations Caitlin McCrory and Daniel Jones, CEO of Hive MLS in North Carolina, in which McCrory said that “any MLS” that “successfully” implements the rule will receive Compass’s support.
MRED’s release does not mention Compass, and repeatedly characterizes the dispute as centering on MRED’s rules.
“Rules enforcement is the most important and difficult responsibility an MLS undertakes on behalf of the cooperative marketplace,” Jensen said.
NextHome CEO James Dwiggins, who yesterday promised his company’s listings would continue to show up on Zillow, wrote on LinkedIn this morning to decry how the ugly battle is playing out in mainstream media, referencing a CNN article published yesterday.
“I guess we need to destroy our industry’s reputation further to do the right thing,” he wrote. “There is simply no world where private listings are needed for 99% of home sellers.”
This is a breaking story. Stay tuned to RISMedia for updates.
Editor’s note: this story was updated with comments from Zillow at 10:28 a.m. eastern time.
Editor’s note: this story was updated with additional comments from Rebecca Jensen at 10:38 a.m. eastern time.
Editor’s note: this story was updated with additional comments from a Zillow spokesperson at 10:43 a.m. eastern time.
