Judge To Decide Compass’s Injunction Against Zillow Listing Policy

Compass and Zillow have now put in their final words before New York City-based U.S. District Court Judge Jeannette Vargas rules on Compass’s preliminary injunction motion in its antitrust lawsuit against Zillow. 

Originally filed in mid-June, the lawsuit focuses on Zillow’s listing access standards policy, which bans listings that have been publicly marketed for more than one business day prior to them being available for display on Zillow, in mid-June. Compass then filed its motion for preliminary injunction just days before the policy was set to take effect. 

On Friday, the two firms filed their court-mandated findings of fact and conclusions of law.

As one might expect, the two parties had very different views on the facts and evidence presented.

Zillow wants to “maintain listing transparency”

In its filing, Zillow asserts that Compass is wrong on both the facts and the law, claiming that the Robert Reffkin-helmed firm has failed to fulfill the requirements needed for Judge Vargas to grant the firm’s preliminary injunction motion. 

Zillow maintains that its listing policy was designed to maintain listing transparency and to protect consumers. The firm also maintains that despite data showing that more Compass agents and listings have been impacted than those of any other brokerage, the policy is being applied neutrally. The filing also touched on Compass’s allegations that Zillow and Redfin conspired, arguing that testimony from executives at both firms show that they developed their listing policies independently, and noting that Redfin ultimately never implemented the policy. 

The defendant also pushed back on Compass’s claims that it is a monopoly power, noting that the listing portal space is full of growing competitors.

“Compass failed to show that there are high barriers to entry in online home search such that Zillow is unconstrained by competition. Recent entrants to the market undermine arguments that there are significant barriers to entry,” the filing states. “For example, CoStar acquired Homes.com in 2021 and its platform has grown rapidly in the four years that followed, from 2.4% to 19% audience share.”

The filing also touches on Compass’s claims of irreparable harm. Zillow argues Compass’s claims are speculative and that its record-breaking financial results in the third quarter of this year contradict its harm claims. 

“Other than belief, there is no evidence that [Zillow’s policy] were the reason for the decline in Compass.com’s traffic,” the filing states. “Nor was any evidence presented, beyond speculative belief, that Zillow’s Standards and any resulting decreased adoption of [three-phased marketing] has caused Compass to lose listings. Compass’s agent denied losing listings as a result of Zillow’s Standards and Compass acknowledged that a drop in adoption of [three-phased marketing] does not mean that it has lost any listings.”

Compass reads the situation differently

Compass’s filing, while touching on all the same bullet points, has a different read on the situation. 

Central to Compass’s argument is the firm’s belief that Zillow is diminishing its three-phased marketing strategy, which it says is a benefit to consumers, agents and Compass. By preventing Compass and consumers in general from reaping the benefits they feel the strategy offers, Compass argues that Zillow is causing harm to both itself and competition within the industry. 

“Instead of competing on the merits, Zillow has used its immense power to exclude competition based on unique inventory,” Compass argues.

Compass also contends that it is “undisputed” that Zillow is targeting Compass with this policy, calling reference to a Zillow strategy document presented as evidence during the hearing that one of Zillow’s goals was to convince agents to swap from their firm to a brokerage that is friendly with Zillow.

Additionally, Compass argued that Zillow created its policy in order to maintain its monopoly and that “Zillow is putting anticompetitive restraints on its customers (home sellers and agents), not its competitors (competing online search platforms).”

It is currently unknown when Judge Vargas will issue a ruling on Compass’s motion, but based on typical lawsuit cadences, attorneys have told HousingWire that a decision may not be reached until the new year.