Last night’s ruling in Zillow’s lawsuit against Chicago-based MLS MRED and mega-brokerage Compass represented a significant legal setback for the portal, even as the larger fight over policy and market power plays out on multiple fronts.
A source close to MRED told RISMedia shortly after the court ruling that the MLS is prepared to enforce its policies and once again cut Zillow off from its listing feed, and is currently looking into reports from member brokers that Zillow has banned MRED listings.
A Zillow spokesperson denied that the portal is banning any MRED listings. The spokesperson said the company is “still assessing the ruling and our next steps” in regards to any appeal.
Zillow had accused Compass and MRED of conspiring to undermine its business in the Chicago region, with Judge John Tharp stepping in to temporarily enforce the “status quo” and disallow MRED from shutting its feed to Zillow, while also preventing Zillow from banning MRED listings.
That temporary order is now null. Notably, Zillow’s claims targeting MRED are also in arbitration, and its accusations against Compass are paused while those arbitration proceedings play out.
In a blog post, the portal said it “continues to fight for” a “fair housing market,” and called the ruling “one step in a longer legal process that is still playing out.”
Zillow previously said in a statement the ruling “hasn’t changed our belief that MRED and Compass coordinated to undermine consumers, or our commitment to proving their misconduct.”
What specifically happens next in the proxy battle between Zillow and Compass over “private” listings? Both sides are pushing forward on multiple fronts, with Compass specifically pointing to another recently resolved case—against Washington-based NWMLS—as evidence of “momentum” in its campaign for “consumer choice.”
A source familiar with Compass’s legal strategy previously told RISMedia that courts would not take a decision in the case as legally binding, but it could be “persuasive” to other judges if similar disputes end up in federal court.
On social media, Compass CEO Robert Reffkin celebrated the “ruling (that) supports (the) rule that Zillow must display all MRED listings.”
But hours later, he posted a map claiming to show that Compass has more listings than Zillow-owned portal StreetEasy in New York City, as the brokerage remains locked in another battle over inventory and policy on the other side of the country.
The law as written
The source close to MRED said that the MLS’s next move is to highlight the latest ruling to members, pulling quotes and focusing on how “MRED is protecting you.” The source described Tharp’s 52-page order as an unequivocal win that affirmed the MLS’s principles.
In his ruling, Tharp wrote that Zillow did not meet the high legal bar in its request for a longer-term order blocking MRED and Compass from moving forward with actions like cutting Zillow off from the listing feed.
Specifically, Tharp did not find enough evidence that MRED and Compass conspired, or that their actions violated antitrust laws. He also said Zillow did not show MRED had monopoly power in the region.
Tharp added that both MRED and Compass had plausible independent reasons and motivations for opposing Zillow’s rules, and dismissed arguments by Zillow that communications between Compass and MRED amounted to a de-facto agreement. Zillow “overstates” the impact of some communications, while relying on inference to connect others, Tharp wrote.
And he found Zillow’s arguments that MRED and Compass were harming consumers or competition unconvincing, writing that “there is no basis to infer that the overall supply of residential real estate listings will be affected” by the use of private networks.
“Zillow repeatedly characterizes the relevant competitive harm in terms of reduced ‘transparency,’” Tharp wrote. “Indeed, the Court notes that the word “transparency” is repeated over 300 times in the parties’ briefs. But transparency is not, standing alone, a goal of the antitrust laws and opacity is not an anticompetitive effect under the (relevant antitrust law).”
A few federal lawmakers saw those transparency arguments in a very different light, writing to Compass and MRED over the summer to express “concern” that private networks—and their partnership—would negatively impact buyers and sellers.
Notably, Tharp also cited the Department of Justice’s (DOJ) scrutiny of the Clear Cooperation Policy (CCP) in affirming that MRED’s “objective criteria” rule arguably has pro-competitive effects and is “consistent with a broader policy judgment” that Clear Cooperation might restrict competition.
Tharp also highlighted the fact that Zillow “resisted amendments” to CCP and even lobbied the DOJ in 2024 in favor of the policy.
Questioned on that effort, a Zillow spokesperson said the company “regularly (has) conversations with a broad range of people about industry issues and how to maintain a healthy housing market that works best for consumers.”
MLSs in motion
The source close to MRED said that the MLS views the ruling as something it can use to pitch other brokerages, evidence that it will stand up for them and protect their data. MRED continues to see itself as a national or maybe even global platform, the source said, with unrelated plans to do presentations in India and Brazil.
Testimony and documents surfaced by the MRED-Zillow lawsuit revealed an extensive campaign by Compass to get other MLSs to enforce that same “objective criteria” rule.
Tennessee-based MLS Realtracs previously threatened to cut off Zillow’s listing feed but ended up striking a deal with the portal after extensive negotiations.
The source said though, that MRED is simultaneously scaling back its connections to other MLSs, both out of concern for potential antitrust issues as well as a more broad view that big MLSs are now competing with each other for the same deals and markets.
That includes pulling out of the COVE Group—a semi-formal advisory committee that consists of the largest MLSs in the country—as well as MRED CEO Rebecca Jensen’s previously reported decision to step down as RESO chair.
As far as the Chicago market, the source close to MRED said the MLS has upcoming, previously planned annual focus groups to get feedback on its own PLN. The source didn’t say whether MRED had any concerns over uncertainty related to another possible disruption to Zillow listings.
