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Compass faces no real harm from Zillow’s updated policy banning publicly marketed private listings from its platform, the portal said in a new legal filing on Monday.
In response to filings in Compass’ antitrust lawsuit challenging Zillow’s private listings policy, the nation’s largest real estate portal said that Compass waited until near the deadline to go to court and was seeking to “turn back the industry-wide status quo of transparency and liquidity.”
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“Zillow provides maximum transparency and has become a trusted resource for millions of users, who are able to use Zillow to find buyer agents who represent their best interests rather than relying on listing agents whose duty is to the seller,” the company wrote in its filing.
It was Zillow’s first response in court to the lawsuit Compass filed a week ago. On Friday, Compass also asked the judge overseeing the case to file a preliminary injunction on Zillow’s updated listing access standards, which require listings to be filed on the MLS and therefore on Zillow within one business day of any public marketing.
The policy seemed to take aim at Compass’ 3-Phased Marketing Strategy, the first of which includes putting a listing on the brokerage’s private listing network without going onto the MLS. The first phase of a Compass listing under the strategy is known as a Private Exclusive.
“Put plainly,” Compass wrote in its complaint, “Zillow has granted itself the power to ban every Compass Private Exclusive listing from going to Zillow because of the way in which Compass markets and executes its Private Exclusive listing strategy internally and externally.”
In its lawsuit, Compass argued that its Private Exclusives were considered “office exclusives,” or exempt listings where the seller directs their agent not to widely disseminate a listing publicly.
According to NAR: “The office exclusive listing shall be filed with the MLS but not disseminated to other MLS Participants and Subscribers.”
A spokesperson for NAR declined to comment on whether Compass’ Private Exclusives were considered office exclusives under that definition.
“NAR is not a party to this lawsuit and has no comment,” the spokesperson said.
According to Zillow’s updated policy, a listing within a brokerage’s private listings network would violate the policy if that network is itself publicly marketed on the brokerage’s website.
“Compass would erect new barriers for buyers by making listings exclusive to each broker — resulting in reduced transparency, less market liquidity, and a more frustrating and less efficient experience for buyers and sellers,” Zillow wrote in its filing.
“Likewise, other entities that display for-sale listings to prospective buyers, including Compass, remain free to display such listings from any source, including the MLS, regardless of whether Zillow would display them,” it continued.
The legal filing was made in opposition to Compass’ request for expedited discovery.
Compass attorneys are hoping to receive from Zillow any communication between Zillow, Redfin, eXp and other brokerages, along with unspecified documents about what it calls the Zillow Ban, documents outlining Zillow’s interactions with certain MLSs, and more.
It also wants data about Zillow’s users and traffic, and documents related to competition in the real estate portal market.
In its filing, Zillow wrote that the request was unreasonable.
“Compass’s requests seek potentially hundreds of thousands of documents (if not more) and terabytes of highly confidential data,” the attorneys wrote. “Compass, without seeking leave, has also indicated that it will seek fact depositions and expert discovery.”