In a brief issued ahead of a hearing in its case against Zillow, Compass homed in on the listing portal’s powers of “intimidation” in issuing warnings to agents that violate its listing standards.
In advance of a preliminary injunction hearing in its case against Zillow, set to begin on Nov. 18, Compass has homed in on what it calls the listing portal’s powers of “intimidation.”
In a supplemental brief filed on Friday, Compass zeroed in on warnings that Zillow sends to agents over listings marketed off of the portal. The brief characterizes the warnings as effectively “blocking” agents from marketing efforts outside of the portal.
Compass referenced an Oct. 13 Zillow press release, which stated that about 90 percent of agents who received a warning about violating the new listing standards only received one warning, meaning that the agents went on to bend the knee to the portal’s new standards.
“…in a public announcement on its website, Zillow confirmed that it has successfully quashed competition,” the brief states. “The announcement proclaimed that Zillow used its immense power to block approximately 90 percent of the agents from publicly marketing properties off Zillow’s website — something agents across the country were previously doing at their clients’ express request and instruction.”
Inman has reached out to Zillow for comment and will update this story with any response the portal provides.
Compass’ brief goes on to suggest that if a seller wants to market their home off of Zillow before putting the home on the portal later, that seller will have no choice but to fire their existing agent and brokerage, then hire a new one in order to get their listing on Zillow.
Through this method, the brokerage claimed in its brief, Zillow is pushing agents to “force homesellers” to put their listings on Zillow. The brief states that this is “instead of Zillow trying to attract those listings by competing with differentiated home marketing products and offerings for homesellers.”
Compass also reiterated its allegation that the portal had conspired with Redfin and alleged that it was “controlling the entire real estate industry” with its listing access rules.
Compass further alleged that Zillow and the multiple listing services (MLSs) were two monopolies that mutually reinforced each other.
“Until this year, NAR’s Clear Cooperation Policy (“CCP”) protected Zillow from having to fight for listings to power its home search website because it required that any listing that is publicly marketed must be submitted to an MLS within one day — meaning Zillow could almost immediately access listings through the MLSs for real-time display on its own site,” the brief states.
The brief also alleges that Zillow is effectively trying to serve as an industry regulatory agency when it is not one. The brokerage also cited past antitrust lawsuits against NAR as well as Google, Apple and Meta. According to the brief, those cases showed that dominant platforms can not “punish” users for using an alternative platform.
“Zillow does not have carte blanche to adopt industry-changing rules and act like an industry regulator under the guise of ‘refusal to deal’ doctrine,” the brief states. “Like the conduct of other tech companies that have recently made and lost that argument, the anticompetitive nature of the Zillow Ban is that it controls what competitors and consumers do outside of Zillow.”
Earlier this week, a judge struck down Compass’ request to force Redfin to turn over documents related to its currently paused policy that was meant to mirror Zillow’s. Compass also had requested an unredacted version of a $100 million rental syndication between Zillow and Redfin.
Compass first lodged its lawsuit against Zillow in June in a move that brought the brokerage’s passion for its private listing network to court. Zillow, which has avoided public comments on lawsuits, has accused Compass of using “double speak” and “hidden listings scheme” in its July legal filing. Zillow also claimed that Compass was not hurt by the portal’s listing policy. Compass is asking the court to issue a preliminary order that will prevent Zillow enforcing its listing standards.