The high-profile, industry-shaking battle between mega-brokerage Compass and dominant portal Zillow is back in the courtroom, as Zillow is asking a court to block a major MLS from cutting off its listing feed, claiming that Compass is engaging in an “illegal conspiracy” to promote its private listing and undermine Zillow.
The 52-page lawsuit, which Zillow posted to its website, claims that early this month Chicago-based MLS MRED “demanded that Zillow reinstate Compass private listings in states hundreds of miles outside MRED’s territory.” This came only shortly after Compass launched a partnership with MRED to take its platform—and private listing network—nationwide.
“The message to Zillow was clear: display Compass private listings everywhere in the United States, or MRED will withhold all Chicagoland listings from consumers on Zillow,” Zillow wrote in a blog post.
According to the lawsuit, on May 8, Compass “terminated—on behalf of itself and ‘every’ Compass ‘brokerage entity or subsidiary’—all direct listing feeds with Zillow nationwide,” the lawsuit says.
“MRED and Compass are colluding to hide home listings from buyers—and conspired to punish Zillow for not going along with it,” the company said.
A Compass spokesperson told RISMedia via email that “Zillow is punishing agents for merely following their clients’ lawful instructions on how they want their homes marketed,” without addressing specific allegations in the lawsuit.
MRED did not immediately respond to multiple emailed requests for comment,
In a statement shared with RISMedia, Zillow’s Chief Industry Development Officer Errol Samuelson said the lawsuit “is about consumers, and competition and fairness in the real estate industry.”
“The MLS in Chicagoland, which is meant to be a marketplace where all the brokers share their listings for the benefit of their sellers and their buyers, instead decided to work with the largest broker in their market and skew the rules to actually hurt consumers and hurt competition,” he said. “What MRED has done with this Compass scheme is undermine what makes MLS so great: the fair, level playing field.”
MRED, Zillow claims, has recently updated its “objective criteria” rules for IDX and VOW to provide a “pretextual basis” for “retaliating” against Zillow and has urged all 43,000 of its members to not provide Zillow with a direct listing feed. MRED’s technology provider is simultaneously threatening to cut off Zillow’s listing feed, meaning the portal would have no access to listings in Chicago. The new rules say that “(e)xclusion criteria may not include, directly or indirectly, the identity of any Participant, brokerage firm, subscriber, licensee, or representative,” with Zillow saying this language is being used as an excuse to terminate its feeds.
Zillow further claims that MRED was threatened competitively by Zillow Preview, its own pre-marketing program.
“Zillow Preview competes directly with the private listing networks operated by MRED and Compass, offering sellers broad exposure rather than a limited buyer pool,” the company wrote. “For MRED, whose monopoly over Chicagoland listing data depends on brokers having no viable alternative, Zillow Preview represented an existential competitive threat—not just a policy disagreement.”
Late last year, Zillow engaged in a long-running public battle with MRED over its private listing network, delaying the implementation of its rules on private listings while pressuring the MLS to change policies.
Zillow further alleges that a Compass executive wrote to another MLS CEO in North Carolina demanding that MLS “rigorously enforce existing policies that prevent the rise of off-MLS databases“ by May 20, which Zillow claims was “a direct reference to cutting off Zillow” from that MLSs listings as well. The lawsuit also claims that RealTracs and MLS CLAW, two other MLSs that recently announced partnerships with Compass, recently updated their rules around “objective criteria” that “closely mirror” what MRED did.
“A self-interested MLS would promote broad distribution of its publicly available listings and would not threaten to withhold those listings from feed recipients such as Zillow—which distributes them to tens of millions of consumers—in service of protecting a discrete percentage of listings that are privately marketed on MRED’s and Compass’ competing private listing networks,“ the complaint states.
And just yesterday, the lawsuit alleges that Compass Head of Industry Relations Caitlin McCrory wrote to Hive MLS in North Carolina to promote the brokerage and disparage Zillow, specifically referencing Zillow’s recent partnership with Realtor.com.
“Zillow is now directly seeking to disintermediate the MLS, and tighten its control of residential real estate in the US as Zillow has add/edit like an MLS and syndicates to Realtor.com like an MLS,” McCrory wrote, according to the lawsuit. “Compass International Holdings is committed to the continued use and support of the MLS as a broker-to-broker cooperative. Which is why we are asking the MLS to rigorously enforce existing policies that prevent the rise of off-MLS databases.”
The lawsuit comes only shortly after Compass dropped its own lawsuit against Zillow, in which the brokerage alleged Zillow had sought to use new rules to undermine Compass’s private listing-focused marketing and platform, pressuring brokers and MLSs with bans if they used private networks.
Zillow eventually dialed back those standards, and even launched its own pre-marketing program to bring exclusive inventory to Zillow’s platforms.
Now, Zillow is essentially accusing Compass of similar behavior—attempting to cut Zillow off from listings if the portal doesn’t drop all restrictions on Compass’s private listings.
“In effect, Compass seeks to achieve by conspiring with MRED what it could not achieve in federal court, leveraging MRED’s local monopoly and nationwide scale to stop Zillow from enforcing its (rules),” the lawsuit reads.
This is a developing story. Stay tuned to RISMedia for updates.
Editor’s note: this story was updated at 2:09 p.m. eastern time with comments from Errol Samuelson and additional information from the lawsuit.
