Six MLSs are joining together in a federal lawsuit against Compass, escalating and consolidating opposition to the mega-brokerage as a long-simmering confrontation between incumbent listing service platforms and the arch-disruptor mega-brokerage appears destined for a prolonged court battle.
Filed in the federal Southern District of New York yesterday by Arizona Regional Multiple Listing Service, REColorado, Canopy MLS, Hive MLS, Doorify MLS and Bridge MLS, the lawsuit asks the court to declare the MLS rules in question do not violate state and federal antitrust law, and block Compass from pursuing its own lawsuits against them.
“Compass is campaigning to restrict access to residential listings so that consumers and other brokers must go through a Compass agent just to learn about a home for sale,” the lawsuit says. “Compass aggressively used the court system to effectuate that campaign.”
A Compass spokesperson told RISMedia via email that “(o)nly the law and the homeowner should tell agents how to publicly market a home, and these MLSs are neither the law nor the homeowner.”
The spokesperson also claimed that MLSs serving more than 350,000 agents across 12 states allow the kind of public marketing off-MLS Compass has lobbied for.
Compass already sued California-based CRMLS, claiming its rules violate antitrust laws. CRMLS previously promised to rally opposition to Compass and support for MLS cooperation, filing its own lawsuit seeking a declaration that its rules aren’t anti-competitive.
As both sides dig in, the outcome is certain to have far-reaching effects across the industry. Compass’s critics and rivals have warned that changing these policies and allowing off-MLS marketing with little or no restriction will fracture the industry, with big companies competing for inventory rather than cooperating on a shared platform.
Compass, for its part, argues that the MLS industry has operated as a monopoly, stunting innovation and competition through restrictive rules that it claims also harm sellers—and the brokerage’s signature marketing programs, which involve hosting listings on both public and private Compass-controlled platforms.
“(Cooperation) rules protect the fundamental purpose of the MLS—to establish and maintain a comprehensive database of accurate and timely information about real estate listings,” the lawsuit reads. “If brokers could use the MLS database to find properties for their buyer-clients while simultaneously withholding their own listings, the database would become incomplete and lose its value.”
Two other MLSs not party to this lawsuit have publicly defied Compass’s demands in recent days, promising to keep enforcing cooperation rules.
A letter sent by REColorado CEO Dana Bennet framed the issue as about protecting consumers, and noted the lawsuit “is not about individual Compass agents or brokers.”
“REcolorado supports seller choice,” Bennett wrote. “But we believe there is an important difference between choosing to keep a property private and publicly advertising a property for sale while withholding that listing from the cooperative MLS database.”
This is a breaking story. Stay tuned to RISMedia for updates.
