The complaint also says Compass ended its direct listing feed to Zillow for all brokerage firms and affiliates nationwide on Friday.
Compass International Holdings Inc. and multiple listing services serving the nation’s third-largest real estate market illegally conspired to threaten to cut off Zillow’s access to properties in the region, harming consumers in the process, Zillow said in a new antitrust lawsuit filed Tuesday.
The lawsuit, filed in the U.S. District Court for Northern Illinois, targets Compass’ premarket listing strategy and its partnership with MRED to distribute Compass’ listings.
The lawsuit is the latest sign that the real estate industry continues to be embroiled in debates that will determine how, when and where properties will be sold in the future, and could potentially impact the portal’s access to properties on the market across the country.
“This action is aimed at restoring competition and transparency in residential real estate,” Zillow wrote.
“In recent years, some of the leading players in the real estate industry, including Chicagoland’s exclusive Multiple Listing Service (“MLS”), MRED, and the country’s largest real estate brokerage, Compass, have erected a barrier to information that is or could be damaging to sellers, buyers, and competitors by hiding their real estate listings behind the velvet ropes of Private Listing Networks (“PLNs”),” Zillow wrote in its complaint.
The lawsuit reveals new details showing that Zillow faces the threat of losing access to a growing share of the real estate properties it has traditionally considered the “lifeblood” of its business.
The lawsuit is a continuation of Zillow’s efforts to prevent the spread of “insidious private listings” that the company claims are harmful to consumers. But it also became clear that the portal faces growing threats over access to the listings that generate its revenue.
Zillow acknowledged in its complaint that the partnership between MRED and Compass makes it impossible to enforce listing access standards in Chicagoland because it risks losing access to all MRED listings.
Late last month, MRED announced it was expanding across the United States, and Compass said it would subsidize the cost of joining up to 100,000 agents. A week later, RealTrax, the MLS serving the Nashville area, followed suit by partnering with Compass.
Zillow also wrote that Compass ended all direct posting feeds to Zillow on May 8th. However, the company maintains a direct feed with the MLS and there are no missing listings in the portal.
“Accordingly, Compass has ended direct feed access to more than 25 Zillows. [percent] We listed the current listings in Chicagoland and gradually increased our actions from Chicagoland to the rest of the country. ”
But that may change.
Zillow wrote on May 5 that MRED threatened to cut off Zillow’s listing feed from the MLS after Zillow suppressed Compass’ listings in Florida, Georgia and California.
As Realtracs expanded across the country, the company also changed its rules, requiring Zillow to display listings that violate its private listing policy or make its feed inaccessible.
“Effectively, this rule change would require Zillow to display all Compass listings, regardless of their criteria, or risk termination of all Realtracs feeds across all brokerages,” Zillow wrote. “In other words, Realtrax (along with MRED) has agreed to use the listing control of another brokerage firm to protect Compass’ PLN.”
Last week, the MLS serving Los Angeles, known as TheMLS/Claw, made similar changes that Zillow says mirror those created by MRED and Realtracks and supported by Compass.
Zillow alleged in its lawsuit that MRED and Compass are enacting an illegal boycott of the portal and that MRED is reinforcing its monopoly.
MRED did not respond to requests for comment.
A Compass spokesperson said in a statement that Zillow is “punishing agents” for complying with customer requests.
“Compass believes homeowners should have the right to decide how to market their homes,” a spokesperson said. “The industry is evolving to offer consumers more choice, and we support that progress.”
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