The heated debate over who controls agents’ listings continued to simmer this week as Zillow filed a new opposition brief in its legal battle with Compass on Thursday.
The private listings-friendly brokerage previously alleged in a June lawsuit that the portal giant is engaging in anticompetitive tactics. The suit stems from a recent policy that bans listings from the popular platform if they are not provided to Zillow within 24 hours, either via a multiple listing service or directly.
On Thursday, Zillow fired back at these claims and asked the court to deny Compass’ request for a preliminary injunction that would prevent Zillow from enforcing the new listing standards.
Inman has reached out to Compass and will update this story with any response the brokerage provides.
The portal asserted that its listing access standards are actually pro-competitive, and that an injunction on the listing standards would harm the public since it would reduce transparency and serve to encourage exclusionary listing practices. It also suggested that Compass is actively trying to “wag[e] a campaign against transparency and listing access,” while speaking out of both sides of its mouth.
“Compass has developed a three-phase Hidden Listing Scheme, through which it can control consumers’ access to home listings, reduce competition, and increase commissions,” the brief states, referencing Compass’ 3-Phased Marketing Strategy, which involves listing a home as a private exclusive, then marketing it as a “coming soon” and then taking the listing public on all platforms.
“Compass should not be allowed to have it both ways by forcing Zillow to share the benefits of its audience while at the same time withholding from Zillow and its customers the benefits of the latest listings,” the brief continues. “The law does not allow Compass to force such terms on to Zillow, and the motion should be denied.”
The brief also alleges that Compass is engaging in “double-speak” in its marketing to consumers.
“Compass uses double-speak to promote [its Hidden Listing Scheme],” the filing says. “Compass claims that the Scheme helps sellers do better and increases competition. But it tells buyers the opposite: ‘Maximize your chance of beating out the competition and potentially avoid bidding wars.’ Compass also claims that the Scheme helps sellers generate ‘demand among serious buyers’ yet concedes that most homes sell in Phase Three. And when a listing is published in Phase Three, the ‘days on market’ and price history are a blank slate, misleading buyers.”
The portal also suggested, in recounting a conversation that Compass CEO Robert Reffkin engaged in with Zillow executives, that the brokerage is only interested in the well-being of real estate agents.
“Indeed, Compass’s claimed consumer harm [by Zillow] rings hollow when its CEO told Zillow executives that ‘All I care about is agents. Taking care of consumers is what you do,'” the brief states. “The reality is that Compass’s Scheme benefits only Compass. The Scheme harms consumers by reducing transparency and liquidity, as multiple consumer advocacy groups have concluded. Instead it is Zillow that faces irreparable injury from being compelled to assist an alleged competitor in inflicting harm on consumers.”
In the legal filing, Zillow argued against various other claims Compass has made.
Among other things, the company said that it cannot have engaged in any exclusionary conduct, as Compass alleged, since as an independent business, it has no duty to engage in dealings with other businesses, like Compass. In terms of any antitrust injury, Zillow likewise argued that Compass’ claims of injury are only in regards to its own brokerage — and therefore, do not have antitrust standing. It also argued that the brokerage could not be at risk of urgent harm, as alleged, since Compass waited nearly three months to request the injunction.
Zillow argued further that it does not hold any monopoly in the market because it faces strong portal competitors, for instance, Redfin, Realtor.com and Homes.com.
“While Compass has been waging a campaign against market transparency to the detriment of consumers and agents, Zillow, by contrast, has a long history of providing transparency and equal access to real estate information, to the benefit of consumers and agents,” a Zillow spokesperson told Inman in an email. “We will not waver in that commitment. Their motion gets both the facts and the law wrong, and we will continue to defend against it to ensure that the integrity of a fair and competitive real estate marketplace remains intact.”
Zillow’s filing comes amid an intense industry debate over how and where listings should be displayed. On Wednesday, for example, CoStar CEO Andy Florance — whose company operates rival platform Homes.com — took to LinkedIn to criticize Zillow’s listing standards. Speaking to agents, Florance alleged among other things that Zillow takes “your clients right out of your hands.” And he criticized Zillow marketing emails that explain how homeowners can create for-sale-by-owner listings on the platform by sending listings directly to Zillow.
See the full filing by Zillow below:
Update: This story was updated after publishing with additional context.
