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The Northwest Multiple Listing Service said that Compass is trying to have it “both ways” when it comes to receiving access to listings in the MLS while building its own private network of listings, according to a new legal filing.
Compass filed the lawsuit against Washington-based Northwest MLS in April, calling the multiple listing service a “monopolist.” The suit was one of several escalations made by Compass — others included criticism on social media — in its quest to pursue a marketing strategy that includes holding listings within its own Private Exclusives network before potentially adding them to the MLS at a later date.
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However, such listings violate NWMLS rules that are in place to ensure transparent access to the broadest pool of listings, the MLS wrote in response to Compass’ complaint. NWMLS also asked a judge to dismiss Compass’ suit.
“NWMLS has no antitrust or common-law obligation to promote Compass’ exclusionary, free-rider strategy,” the MLS wrote. “NWMLS’ rules were designed to prohibit conduct like Compass’, which destroys competition in the real estate market, harms consumers, and contravenes NWMLS’ founding purpose.”
Among those rules is a requirement that the MLS’ 32,000 member brokers who get access to competitors’ listings also submit their own.
“That requirement ensures that all members have fair access to each other’s listings and eliminates the possibility that one member may extract value from others without a corresponding contribution for that value,” NWMLS wrote.
The MLS specifically pointed to Compass’ 3-Phased Marketing Strategy, an approach that involves testing a listing off-MLS to gain insights on pricing, the home itself and buyer interest. If homes don’t sell while in the private status, the listing enters “coming soon” status, followed by broader public marketing on the MLS as an active listing.
Nearly half of the brokerage’s listings outside of Washington in the first quarter started as Private Exclusives, while most (94 percent) eventually went onto the open market, the company said in its complaint.
NWMLS wrote that the strategy was designed “to steer those listings to a Compass-represented buyer.”
“Compass, however, cannot have it both ways,” NWMLS wrote.
In footnotes within the legal filing, NWMLS called into question the private nature of Compass’ Private Exclusives.
“The only thing ‘private’ about the Private Exclusive phase is that Compass disseminates the listing to its 34,000 ‘nationwide’ agents and their ‘millions of buyers,’ but not to non-Compass agents, thus contradicting the Complaint’s conclusory assertions about owner security and privacy,” NWMLS wrote. “Compass wants its agents’ ‘millions of buyers’ to know about the listing, but not competing NWMLS member firms, and their potential buyers.”
After a behind-the-scenes back-and-forth between NWMLS and Compass, the MLS cut off Compass’ license to the MLS’ IDX data feed for two days in April.
“The suspension of the IDX data feed merely meant that, for two days, Compass could not transfer other members’ listings from NWMLS’ database to Compass’ public facing website,” NWMLS wrote.
The MLS asked the court to dismiss the case with prejudice, meaning that, if the judge agrees, Compass couldn’t refile the lawsuit.
Compass is now fighting a multi-front battle against organizations and companies that are enforcing rules that would undermine the company’s private listings strategy.
Last week, it filed suit against Zillow, the largest real estate portal, seeking to block the company’s policy banning private listings that have been marketed publicly.
Read NWMLS full filing here:
Editor’s Note: This story was updated to remove a word from the title of the NWMLS.
