CoStar Group has offered its two cents on Zillow’s antitrust lawsuit against Compass International Holdings and MRED MLS, in which the portal claimed the brokerage and MLS illegally conspired to threaten to cut off Zillow’s access to listings in the region— harming buyers and sellers in the process.
CoStar filed a 198-page amicus brief on Wednesday opposing Zillow’s request for a preliminary injunction, which would bar MRED MLS from cutting off the portal’s access to its listing feed again. A federal judge already ordered MRED to restore the feed on May 22 through a temporary restraining order.
An amicus brief allows an individual or organization that has a strong — and relevant — interest in a lawsuit to offer “additional, relevant information or arguments” that might be helpful to the court, without becoming a plaintiff or defendant. The court accepted the amicus filing from CoStar, as it is a Zillow competitor and has knowledge of the “structure, competitive dynamics and economics of the residential real estate marketplace.”
The real estate information, analytics and online marketplace centered its brief around Zillow Preview, a two-month-old program the portal crafted to enable agents and their sellers to “pre-market” listings. Zillow Preview listings get “priority placement” in homebuyers’ search results and saved-home alerts, and feature broker branding, while listing agents also gain access to real-time listing insights and have the opportunity to be the first point of contact for homebuyers requesting additional information.
Although Zillow has stressed that Preview operates within MLS guidelines and fits within the portal’s Listing Access Standards, CoStar said the program’s existence undercuts any argument Zillow has against Compass and MRED, which announced a partnership in April to distribute Compass exclusives and coming-soon listings to MRED’s private listing network PLN participants.
Andy Florance, CoStar Group CEO
“Unconstrained by consistency, in this litigation Zillow audaciously (and hypocritically) complains about brokerages ‘walling off the listings in their large networks from outside competitors or preventing competitors from publicly displaying those listings,’ and ‘using their large networks to lure buyers and sellers, capturing so-called network effects,'” the briefing read. “But the practices that Zillow vociferously condemns describe precisely Zillow’s own behavior and objectives with respect to Zillow Preview: Zillow walls off its premarket listings from competitors like Homes.com through exclusive deals; and seeks to use its large network, which now includes listings not available to rival platforms, to lure customers.”
CoStar’s amicus brief claims Zillow Preview is anti-competitive for three main reasons:
- Zillow Preview includes 60+ brokerage and franchise partners, the biggest of which are Keller Williams, REMAX, HomeServices of America, United Real Estate and Side. These pre-marketing agreements are exclusive and lock Homes.com — and any other competitor — from having access to these listings.
- Zillow and Realtor.com have entered into an agreement to display Zillow Preview listings on Realtor.com starting this summer. CoStar likened the agreement to Zillow’s FTC-challenged deal with Redfin, saying that it prevents Realtor.com from competing with its own pre-marketing offering.
- Zillow Preview is part of a larger anti-competitive company strategy that includes Zillow Premier Agent and Zillow Home Loans, over which Zillow is facing several class-action lawsuits.
Lastly, CoStar argued that a preliminary injunction should be denied because Zillow could remedy any alleged irreparable harm by backing off its listing ban, thus maintaining access to MRED’s direct listing feed.
“The core of Zillow’s irreparable harm argument stems from the prospect of losing MRED’s listings, causing Zillow’s ‘platform [to] be less valuable,'” the filing read. “That outcome lies entirely within Zillow’s control. As the Complaint and Motion recognize, Zillow faces no threat of losing MRED’s listings so long as it does not ban Defendants’ pre-MLS listings. If Zillow upholds the principle of transparency it espouses and does not ban certain listings, then it will retain MRED’s listings and suffer no harm at all.”
Zillow and Compass both commented on the brief, with Zillow slamming CoStar for blurring the lines between pre-marketing and private marketing.
“Zillow Preview is pre-marketing — publicly visible for any buyer to see it, save it and connect with the listing agent directly for free. No buyer is required to work with any specific brokerage to access it,” a Zillow spokesperson told HousingWire. “Compass Private Exclusives are pay-to-play private marketing. Those listings are hidden from buyers unless they work with a Compass agent.”
“The explicit purpose is to route listings through Compass’s own network before — or instead of — making them available to the public,” they added. “Calling those the same thing is a word game designed to muddy a clear distinction, and it is exactly the kind of conflation that harms buyers and sellers when it goes unchallenged.”
Meanwhile, Compass echoed CoStar’s talking points, saying that Zillow is inhibiting “seller choice.”
“It’s hard to take Zillow’s transparency argument seriously when they’re banning listings simply because a seller chooses a different marketing strategy,” the spokesperson told Inman. “Transparency means giving consumers accurate information and clear disclosures about who’s providing that information and whether they have a financial relationship with the portal.”
“It does not mean forcing every homeowner to market their property according to Zillow’s preferred profit model,” they added. “Homeowners deserve the freedom to choose the marketing strategy that best serves their interests, and we will continue to defend that principle.”
The preliminary injunction hearing is in July.
