The now-defunct brokerage failed to convince a jury that Zillow used unfair tactics when it gave non-MLS listings a separate place on its site.

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Zillow has successfully fought off the remaining claims in a legal challenge from a now-defunct brokerage that had accused the real estate search giant of using deceptive tactics to hide non-MLS listings on its site.

On Sept. 29, a jury found that the Real Estate Exchange — more commonly known as REX — failed to prove that Zillow used false advertising as it separated non-MLS listings from their MLS counterparts, making them available on a different page of its site.

The jury, meeting in U.S. District Court in Seattle, also said Zillow established that it was innocent of a second allegation of engaging in unfair or deceptive acts.

“We’re pleased with today’s victory and are ready to move on and focus on what matters: helping customers who come to Zillow get into their next home,” Will Lemke, Zillow corporate communications manager, told Inman in an emailed statement.

These determinations came a few weeks after the court dismissed all antitrust allegations that were part of the lawsuit, which had originally targeted both Zillow and the National Association of Realtors. The decision is now considered final unless it is appealed.

The failed challenge to Zillow’s business practices had attempted to strike at the heart of how the popular home-listing portal obtained its data from MLSs and presented those results separately from non-MLS listings. 

At issue was Zillow’s use of the Internet Data Exchange feed (IDX), which observed NAR’s “no commingling rule” to populate its listings. The rule, which is optional for MLSs, says that listings obtained from outside an MLS must be presented separately from those obtained from MLS sources through the IDX.

REX, which filed the lawsuit in early 2021 had argued this practice on Zillow’s site hampered its ability to compete. The small, low-commission brokerage sought to go around MLSs and traditional real estate agents, marketing home listings directly to buyers, including through platforms such as Zillow.

But because of Zillow’s policies, such listings did not appear alongside ones from the MLS which, REX argued, hurt their chances of being seen.

REX claimed users paid 3.3 percent on average in commissions, significantly lower than the national average of 5.5 percent for those working with a traditional brokerage.

By May of 2022, REX was no longer in business.

Email Daniel Houston

MLS | Zillow
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