Compass filed a lawsuit last summer asking a court to block Zillow from enforcing its listing access standards, which seek to halt an expected surge in private listings on the public market.
A judge on Friday denied Compass’ request to stop Zillow from enforcing a ban on listings that are publicly available but not shared on multiple listing services and are available on the portal for less than a day.
The judge said Compass had not demonstrated a likelihood of success.
The ruling was issued in response to Compass’ request for a preliminary injunction regarding the insurance policy and is not considered a final judgment. This means that the securities company’s lawsuit against the portal may continue.
However, the order reversed several of Compass’s key claims in the case, including that Zillow colluded with Redfin in announcing similar policies and that Zillow is a monopoly in the market.
“Plaintiffs’ motion for a preliminary injunction is denied because Plaintiffs have not demonstrated a likelihood of success on the merits,” Judge Janet Vargas wrote in her ruling. Compass is the plaintiff in this lawsuit.
At the heart of this case is Compass’ three-phase marketing strategy (3PM). It begins the listing with Private status, which is off the MLS and available through Compass agents. If unsold, the listing will move to a Coming Soon listing and eventually exit the MLS.
Zillow’s policy was an effort to eradicate the rise of these privately listed networks. These networks were gaining popularity early last year, but the portal announced plans to ban them from the marketplace if they are advertised for more than a day in a way that Zillow deems public.
Vargas said that despite Zillow’s policy, home sellers are free to continue using Compass’ 3PM strategy.
“In fact, home sellers can choose to list their properties for sale through pre-marketing strategies like 3 p.m., even at the cost of not listing on Zillow,” she wrote.
The lawsuit is a dispute between two of the largest residential real estate companies over how properties are marketed.
Compass filed a lawsuit last summer asking a court to stop Zillow from enforcing the policy. The two companies have been at loggerheads ever since, and just this week, executives from each appeared on stage at Inman Connect New York.
Zillow said Friday that the ruling is a victory for consumers.
“Today’s ruling is a clear victory not only for Zillow, but for consumers, agents, brokers, and the entire real estate industry,” a Zillow spokesperson said in a statement. “Zillow believes everyone deserves equal access to the same real estate information at the same time. Compass is doing the opposite: hiding properties in its own vaults and profiting for itself at the detriment of consumers and small businesses.”
Compass CEO Robert Refkin said the ruling was not a loss and the company would continue to fight.
“Today’s decision is not a loss and our litigation will continue,” Compass CEO Robert Refkin said in a statement. In Zillow’s internal strategy document, Zillow stated that it would “punish agents who choose to list their products on alternative networks.” Because agents are our customers, we have a duty to protect them from Zillow, which has made it clear that it will “punish agents.” ”
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