Last week, CoStar tried to step into the fray between Zillow, Compass and Chicago’s MLS. Today, a judge overseeing a case between the three combatants denied the attempt.
CoStar filed what is known as a “friend of the court” or amicus brief in the antitrust lawsuit Zillow filed last month against MRED MLS and Compass. The judge didn’t explain his reasoning behind the one-sentence ruling.
“We sought to call attention to Zillow’s obvious hypocrisy: Zillow is asking the Court to guarantee its access to MLS listing data while simultaneously creating its own pre-market listing channel and seeking to restrict others,” Gene Boxer, CoStar’s general counsel, told Inman in a statement.
“That contradiction matters to the entire residential real estate industry. Zillow cannot claim to be defending openness and transparency while building a system that advantages Zillow, withholds inventory from competing platforms and undermines the very principles it invokes in court.”
The lawsuit targets what Zillow alleges is an illegal conspiracy between MRED and Compass to force Zillow to display listings that violate its own rules. Zillow alleged the parties are threatening to cut Zillow’s access to the listings that power its platform to get their way.
MRED actually did follow through on its threat to cut off Zillow’s access to the direct feed of listings submitted by all brokerages. That was in response to what MRED said were Zillow’s violations of MLS rules that prevent targeted censorship of listings submitted by a specific brokerage.
A second major MLS, Realtracs in Nashville, has threatened to follow MRED’s lead and cut off Zillow’s access to listings in that region. (The two parties are still negotiating as of Monday, and Zillow’s full feed of listings in the Realtracs coverage area remain live.)
CoStar’s attempted intervention in the case is only the latest effort to differentiate itself as a worthy alternative to Zillow.
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.
Both portals compete for consumer attention as they use real estate listings to build an audience that can then be monetized via buyer and seller leads as well as other revenue streams.
In its proposed filing, CoStar focused on Zillow Preview, the portal’s recent feature that allows agents to pre-market listings on the platform.
CoStar argued in its proposed filing that Zillow was trying to have it both ways, with rules blocking some of Compass’ pre-marketed listings but a program that allowed agents at other brokerages to pre-market listings directly on Zillow.
“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.”
