In its first major response in court to an antitrust lawsuit filed by Compass back in April, Northwest MLS (NWMLS) told a judge that allegations it broke the law by banning Compass’ private listings are “bereft” of legal merit, claiming that Compass merely wanted a “free ride” when it sued over allegedly anticompetitive rules and practices.
In a filing on Monday, NWMLS urged a judge to dismiss the lawsuit and not allow Compass to refile or modify its complaint, arguing that there are no substantial or supported accusations of illegal conduct.
“Compass claims to have suffered ‘anticompetitive harm’ when just its license to NWMLS IDX listing data feed was suspended for two days,” the filing reads. “Yet, Compass wants to free ride by depriving its competitors of access to Compass’ own listings through its Private Exclusive program.”
“Compass cannot have it both ways—depriving its competitors of Compass’ newest and most choice listings while claiming it needs unfettered access to all other brokers’ listings,” the filing continues.
The spat between NWMLS and Compass preceded a larger battle between Zillow and Compass, over some of the same issues. Earlier this year, Compass sought to recruit recent home sellers for a class-action lawsuit, before finally filing its own antitrust suit.
According to Compass, the brokerage initially sought to work within NWMLS’ rules around how a listing can be marketed, which largely mirror that of the National Association of Realtors®’ (NAR) Clear Cooperation policy—although NWMLS is not NAR-affiliated.
According to Compass, NWMLS broke or bent its own bylaws to prevent Compass from hosting its own private listings. The brokerage claims that this was an attempt to push Compass out of the region, noting that local independent Windermere is heavily represented on NWMLS’ board.
NWMLS eventually shut off Compass’ IDX feed (briefly), but Compass was never removed from NWMLS and “still maintained full access to all NWMLS listings data,” according to the latest filing.
According to NWMLS, nearly everything Compass has claimed was an antitrust violation was actually NWMLS “fairly enforc(ing) its own organizational rules, which Compass agreed to follow as part of its membership.”
“Compass’ monopolization claim relies upon the false principle that NWMLS bears an obligation to deal with it on Compass’ preferred terms. Antitrust law imposes no such obligation on NWMLS,” the filing reads.
Compass has alleged that NWMLS’ status as the largest MLS in the area gives it monopoly power, and that the rules around private listings—which do not have the same “office exclusives” exception as Clear Cooperation—are designed for market control.
“NWMLS has successfully prevented any meaningful threat to itself and its owner-brokerages by adopting and enforcing a series of rules designed to force anyone buying or selling a home in Washington to do so through the NWMLS,” Compass previously claimed in a statement.
While disputing this more broadly, NWMLS also argues that Compass did not show any evidence that NWMLS’ rules were harming competition.
“Compass’ antitrust claims also fail because it does not allege that NWMLS’ conduct harmed competition, only that it harmed a competitor,” NWMLS wrote. “Longstanding” rules around private listings are designed to keep the market open, NWMLS claims, and has nothing to do with Compass and what it characterizes as an “innovative” model for marketing properties.
“At bottom, Compass complains that NWMLS’ rules prevent it from withholding its own listings from the NWMLS database, while Compass takes full advantage of the other firms’ continuing to submit all of their listings in accordance with NWMLS rules. That is not innovation; it is free riding,” NWMLS wrote.
“Preventing free-riding enhances competition, and the parties need not engage in expensive and unnecessary discovery to demonstrate this point,” NWMLS continued.
