A federal judge has denied Zillow’s bid to block Midwest Real Estate Data (MRED) from enforcing its listing rules, handing the Chicago-area MLS and Compass a significant victory in a months-long legal fight with the portal over how listings are marketed and displayed online.
U.S. District Judge John Tharp on Tuesday denied Zillow’s motion for a preliminary injunction and dissolved a temporary restraining order that had required MRED to restore Zillow’s access to its listing feeds after the MLS shut them off in May. In a separate ruling, Tharp granted MRED’s request to compel Zillow’s claims against the MLS to arbitration and stayed the federal case against Compass while those proceedings play out.
The rulings follow a contentious two-day hearing in Chicago this summer over Zillow’s allegations that MRED and Compass conspired to restrict the portal’s access to listing data in an effort to force Zillow to abandon its Listing Access Standards — a policy that bars listings from appearing on Zillow if they were previously marketed through certain private listing networks before reaching the broader market.
The fight also spilled into public view, with Zillow and Compass launching dueling social media campaigns and paid advertising aimed at agents, brokers and consumers over who was to blame for the missing listings.
The dispute escalated in May when Zillow sued MRED and Compass over their partnership to expand the MLS nationally, alleging the companies had conspired to pressure the portal into abandoning its Listing Access Standards. MRED later threatened to cut Zillow’s IDX and VOW feeds unless it stopped blocking listings that had first been marketed through private listing networks, prompting Zillow to seek an injunction.
MRED ultimately followed through on its threat and on May 20 and severed the feeds to Zillow, causing thousands of Chicago-area listings to disappear from the home search platform before the court ordered access restored.
Tuesday’s decision is not a final ruling on Zillow’s underlying antitrust claims. But Tharp’s 54-page opinion offered a skeptical preliminary assessment of several key elements of the portal’s case.
To secure an injunction, Zillow was required to make what the court described as a “strong showing” that it was likely to succeed on at least one of its Sherman Act claims. Tharp stressed that the standard did not require Zillow to prove it would ultimately win the case, but required more than a mere possibility of success.
On Zillow’s central allegation that MRED and Compass worked together to deprive the portal of listings, Tharp acknowledged extensive communications between the two companies, repeated opportunities to coordinate and overlapping opposition to Zillow’s Listing Access Standards.
But he found the evidence did not sufficiently distinguish Zillow’s conspiracy theory from the possibility that MRED and Compass were independently pursuing aligned interests.
“Zillow has not made the required strong showing that MRED and Compass agreed to cut off Zillow’s access to residential real estate listings,” Tharp wrote. “Its direct evidence does not establish that agreement, and its circumstantial evidence does not sufficiently distinguish the inference of agreement from the competing inference of independent conduct.”
Tharp also rejected Zillow’s argument, at this stage of the case, that MRED and Compass had engaged in a type of coordinated boycott that would be considered automatically unlawful under antitrust law. Under a broader “rule of reason” analysis, the judge found Zillow had not sufficiently established the relevant market in which the alleged restraint harmed competition, had not made a strong enough showing of market power and had not shown that the challenged conduct substantially harmed competition rather than primarily Zillow itself.
Zillow similarly failed to make the required showing on its monopolization claim against MRED, with Tharp finding the company had not sufficiently established monopoly power in a cognizable market, willful maintenance of that power or antitrust injury.
MRED and Compass claim victory
MRED moved quickly on Tuesday to characterize the rulings as a significant victory for the MLS and its ability to enforce the same data-use rules against Zillow that apply to other recipients of its listing feeds.
A person familiar with MRED’s position told Inman that with the temporary restraining order now dissolved, the MLS considers itself free to fully enforce its rules against Zillow again. That could include another cutoff of Zillow’s access to MRED’s collective data feed if the portal resumes blocking listings under its Listing Access Standards, while also allowing MRED to move ahead with its national expansion without the temporary geographic restrictions imposed during the litigation.
That expansion has itself been a major point of contention in the case. MRED announced in April that it would expand beyond its traditional Chicagoland footprint, with Compass agreeing to make nationwide inventory available through MRED and subsidize MRED membership for as many as 100,000 Compass agents.
Zillow argued the expansion was part of a coordinated effort to undermine its Listing Access Standards. Tharp, however, found the initiative did not amount to direct evidence that MRED and Compass had agreed to cut Zillow off from listing data, describing MRED’s national expansion as no “smoking gun.”
Compass likewise cast Tuesday’s ruling as a broader validation of its long-running argument that homeowners should be able to choose how and when their properties are marketed.
Yesterday’s ruling “is a clear victory not just for Compass International Holdings and MRED, but for consumers, real estate professionals, brokerages and everyone in the real estate industry that wants to compete freely on behalf of their clients,” a Compass International Holdings spokesperson told Inman.
“This decision affirms that choice belongs to the homeowner, and any effort to punish consumers for exercising that choice is anti-competitive and harmful to consumers,” the spokesperson added. “Real estate professionals have a fiduciary duty to serve their clients; Zillow does not.”
The court did not itself rule that Zillow’s policies are anti-competitive or issue a broader finding that homeowner choice was determinative in the case. Rather, Tharp concluded that Zillow had not made the required showing at the preliminary injunction stage that MRED and Compass entered an unlawful agreement or that the challenged conduct substantially harmed competition.
Zillow says fight is not over
Zillow, meanwhile, emphasized Tuesday that the rulings did not amount to a final judgment on its allegations.
This ruling “is not the end,” the company said in a blog post responding to the decision. “This was not a final ruling on Zillow’s case. It was not a finding that MRED and Compass did nothing wrong.”
Zillow said it remains committed to pursuing allegations that MRED and Compass conspired to harm competition and maintained that the central question in the case has yet to receive a final determination. The company also continued to argue that MRED and Compass entered into their national partnership for the purpose of pressuring Zillow to abandon its Listing Access Standards — a characterization Tharp declined to adopt at the preliminary injunction stage.
Zillow has also spent months trying to reduce its reliance on MLS feeds in markets where access could be disrupted. During the May standoff with MRED, the company promoted its BeOnZillow program, which allows brokerages to send listings directly to the portal rather than relying solely on an MLS feed.
The next phase of the dispute will largely move outside federal court.
Tharp found Zillow’s claims against MRED fall within a mandatory arbitration provision contained in the MLS Grid agreement governing Zillow’s access to MRED’s IDX and VOW data. He ordered those claims to arbitration and stayed Zillow’s claims against Compass as well, finding the factual and legal issues surrounding the two defendants substantially overlap.
There is not yet a clear timetable for arbitration.
In the meantime, however, the temporary restrictions governing MRED and Zillow are gone — potentially reviving the practical dispute that triggered the litigation in the first place.
MRED’s position remains that Zillow must follow the same listing-display rules as other recipients if it wants access to the MLS’s collective IDX and VOW feeds. If Zillow resumes withholding listings that run afoul of its own standards, MRED maintains that cutting off those feeds remains an option.
