The real estate search portal on Monday asked a federal judge to block MRED from cutting back on the feed it sends to Zillow for Chicago listings.
Unless a federal judge agrees to intervene, Zillow will either have to repeal what it claims are pro-consumer rules across the country or risk losing its listing source in Chicagoland, the company said in a new lawsuit against Compass and the Chicago-based MLS.
Zillow on Monday asked for a preliminary injunction in a new motion in the U.S. District Court for Northern Illinois, saying it is likely to succeed in a lawsuit it filed last week against MRED and Compass, saying it will suffer harm to itself and consumers if a judge does not intervene.
“Without an injunction, Zillow would be forced to abandon its transparency-promoting practices and support its competitors against its will, or lose the essential listing needed to compete, all of which would degrade Zillow’s service and cause irreparable harm to Zillow’s platform, business, goodwill, and reputation,” the company said in a new filing.
At issue in the lawsuit is whether Zillow can uphold its listing access standards, a set of rules created and implemented since last year to stop the proliferation of private listing networks.
Compass has sought to circumvent these rules in order to offer more options to sellers looking to market their homes without the restrictive rules from portals like the MLS and Zillow.
The debate is engulfing the industry as MLSs rush to update rules for upcoming listings. Four major MLSs, including MRED, have agreed to expand nationally, change their rules and receive direct listing feeds from the brands that make up Compass International Holdings.
Zillow said its recently launched Zillow Preview option, which displays some commercially available listings, is a competitor to the private listing networks created by both Compass and MRED.
The company directly named MRED CEO Rebecca Jensen and Compass CEO Robert Refkin as co-conspirators in the alleged misconduct.
“To protect Defendants from competitive threats, MRED CEO Rebecca Jensen and Compass CEO Robert Refkin secretly and publicly used MRED’s monopoly power and control over the Chicagoland listings feed to “We have worked in concert to force competitors like llow to display undesirable private listings, abandon consumer listing policies, and block emerging competing services that prioritize access over exclusivity,” Zillow wrote. In the new application form.
MRED now has members nationwide, and the MLS is threatening to cut off Zillow’s direct feed of listings if the portal continues to block pre-sale listings that violate listing access standards.
The company continues to consider entering into a direct backup listing agreement with a brokerage firm in the event that its MLS feed is interrupted or stopped. Compass informed Zillow on May 8 that it has ended direct listing feeds to Zillow for all of its brands. (Zillow writes in the new filing that Compass has more than a third of the Chicago market share.)
Zillow said in its initial complaint that MRED requested a response by May 19, suggesting that Zillow is on the brink of losing its MLS data feed in the nation’s third-largest real estate market unless a judge rules in MRED’s favor and issues a preliminary injunction.
Without a favorable ruling from a judge, Zillow said it faces the “impossible decision” of waiving its listing access standards, allowing listings initiated on private listing networks to “free ride on Zillow’s platform,” or losing access to MRED’s listings.
“Either choice would result in immediate and irreparable harm to Zillow,” the company wrote.
Zillow wrote that losing its source of listings in Chicago “would reduce viewership, harm products that rely on widespread sharing of listings, undermine consumer confidence in Zillow’s platform, and cause significant but uncertain business losses.”
Waiving the standards would also be harmful, the company argued.
“If stripped of its strategy to maintain the quality and quantity of listings while this litigation proceeds, Zillow would face a downward spiral in which the loss of listings would lead to decreased traffic, reducing the liquidity and attractiveness of its overall platform, thereby impacting its overall business in unquantifiable ways,” the paper wrote.
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