A coalition of consumer protection, housing, civil rights and fair competition organizations on Wednesday asked federal regulators to investigate Compass’s contract with Midwest Real Estate Data to expand its private listing network nationwide.
The move returns Zillow, Compass and MRED to federal court in Chicago, while also increasing watchdog scrutiny of restricted-access listing channels.
In a letter to the Federal Trade Commission and the Department of Justice, the group argued that Compass’ agreement with MRED, and similar arrangements with other MLSs, could reduce listing transparency, weaken competition among brokers, and raise fair housing concerns.
“We urge an investigation into whether this agreement constitutes an illegal effort to reduce transparency and fair competition for homebuyers and sellers,” the groups wrote.
The coalition also framed the issue as one of housing affordability and market access, warning regulators that “dominant companies” should not be allowed to use “consolidation and monopolistic listing practices to reduce transparency, entrench market power, and limit fair access to housing opportunities.”
The letter was signed by the Consumer Federation of America, the American Economic Freedom Project, Americans for Financial Reform Education Fund, Consumer Action, Demand Progress Education Fund, National Consumer Law Center, Rise Economy, and the Woodstock Institute.
Organization warns of damage caused by private listings
While the hearing in Chicago this week will focus on Zillow’s listing access standards and MRED’s decision to discontinue Zillow’s listing feed in May, the letter focused more broadly on the expansion of the private listing network and the consumer, competition, and fair housing concerns raised by limited-access listing channels.
“These transactions reduce transparency and threaten to undermine competition in the residential real estate market, raising serious anti-consumer concerns,” the coalition said in the letter.
In April, Compass signed an agreement with MRED to expand the Chicago-based MLS’s private listing network nationwide. Compass also offered to subsidize a portion of the cost of joining MRED for the first 100,000 Compass agents to join MRED as full members. Since then, Compass has announced similar agreements with Bright MLS, Realtrax and MLS/CLAW, according to the letter.
A coalition of watchdog groups argued that such agreements could reduce consumer choice, discourage price competition, and increase incentives by encouraging transactions within affiliated broker networks. They also warned that private listing networks could limit buyers’ access to homes for sale, especially in tight housing markets.
“In an already tight national housing market with limited inventory, buyers may not even know that a home is for sale, pushing the dream of homeownership even further away,” the group wrote.
Fair housing concerns also feature prominently in the new letter. The group cited previous Zillow research on MRED’s private listing network in the Chicago metropolitan area, which found that homes in majority-white neighborhoods were more likely to be sold through private channels than homes in majority-nonwhite neighborhoods.
“These private networks raise widespread concerns that they selectively exclude protected classes of consumers by controlling who can even view homes for sale,” the group wrote.
Zillow, Compass, MRED go back to court, letters arrive
The letter arrives as Zillow, Compass and MRED begin a two-day preliminary injunction hearing in the Northern District of Illinois. The hearing is expected to determine what limitations remain while the broader antitrust case proceeds, including whether Zillow can enforce its listing access standards on MRED-listed companies and whether MRED can withhold listing feeds from Zillow.
Zillow alleged that Compass and MRED used private listing networks to restrict access to inventory and stifle competition. Compass and MRED accused Zillow of using the power of its platform to dictate how listings are marketed.
Zillow is also in the race for an early public listing. This year, the portal announced Zillow Preview, an upcoming channel with initial participation from Keller Williams, REMAX, HomeServices of America, Side, and United Real Estate. While Zillow is positioning the channel as a public-facing alternative to private networks, the move highlights a broader industry scramble to control the visibility of listings before homes are fully placed on the public market.
Zillow sued MRED and Compass in May, alleging that the companies conspired to blackmail access to Chicago-area listings unless the portal displayed Compass listings, and that Zillow violated listing access standards. MRED then blocked Zillow’s feed on May 20, and two days later a federal judge ordered MLS to restore access to Zillow.
CFA’s latest public Form 990, which covers 2024, does not identify Zillow as a major funder. When asked if Zillow provides financial support to CFA, a Zillow spokesperson told Inman that the company does not provide significant financial support to CFA, but added that Zillow has sponsored several CFA events over the years.
Mr. Inman also contacted Compass and MRED for comment on the CFA-led letter.
Observer pressure is not new
Surveillance pressure on Compass has increased in recent months. Consumer advocacy groups and elected officials are increasingly scrutinizing Compass’ growth strategies, including its acquisition of Anywhere Real Estate, expanding its market share in key housing markets and concerns that a private listing could lead to more internal trading.
In April, the Consumer Policy Center released a report finding that Compass has built up dominant market share in several major housing markets and is increasingly maintaining transactions within its network at rates that outpace many of its competitors.
The report, based on 5,000 recent home sales in Boston, Washington DC, Chicago, San Diego and Austin, found that the combined Compass and Anywhere entities accounted for 30 percent to 39.5 percent of sales in all five markets studied. In Washington, D.C., the Compass double ending rate reached 41 percent, according to the report.
The new letter also cited previous calls from Sen. Elizabeth Warren and other lawmakers for federal regulators to scrutinize Compass’ acquisition of Anywhere. In a December letter, Warren and Sen. Ron Wyden asked the Justice Department and the FTC to investigate Compass’ acquisition of Anywhere. In a separate letter in February, Warren and Senate Minority Leader Chuck Schumer expressed concerns about the deal’s impact on home prices and competition.
Compass has previously pushed back against criticism of its private listing strategy, arguing that sellers should be given more choice in how they market their homes. The company also said agents outside of Compass will have access to its private, exclusive content and that agents are expected to act in the best interests of their customers.
Zillow, meanwhile, positions its listing access standards as a consumer transparency measure, arguing that homes sold to a select group of buyers should be widely available to the public. MRED argued that Zillow’s rules overstep the portal’s role and interfere with how brokers and MLSs serve sellers.
The consumer groups concluded their letter by asking federal regulators to ensure that dominant companies do not use consolidation or exclusive listing practices to reduce transparency or limit access to housing opportunities.
“No one company should have a monopoly on access to the American Dream,” the group wrote.
Email AJ LaTrace
