Judge denies Compass’ request to end Zillow’s listing policy
Compass filed the lawsuit last summer, asking the court to block Zillow from enforcing its Listing Access Standards. In a ruling Friday, the judge said Compass “has not demonstrated a likelihood of success.”
A judge on Friday denied Compass’ request to block Zillow from enforcing its ban on listings that are publicly marketed but not shared on the multiple listing service and are available to the portal within a day.
Compass, the judge said, had not shown a likelihood of winning the case.
The ruling came in response to Compass’ request for a preliminary injunction on the policy, and is not considered a final judgment — meaning the brokerage’s lawsuit against the portal could continue.
But the order undermined several of Compass’ arguments that were key to the case, including that Zillow colluded with Redfin in announcing a similar policy and that Zillow was a monopoly in the marketplace.
“Because Plaintiff has not demonstrated a likelihood of success on the merits, Plaintiff’s request for preliminary injunction is denied,” Judge Jeannette Vargas wrote in her ruling. Compass is the plaintiff in the case.
At the heart of the matter is Compass’ three-phase marketing strategy (3PM), which initiates a listing in a private status outside the MLS and available through a Compass agent. If the listing remains unsold, it will become a Coming Soon listing before ultimately hitting the MLS.
Zillow’s policy was an attempt to halt the rise of such private listing networks. These networks grew in popularity early last year before the portal announced its plan to ban listings from the marketplace for the duration if they were advertised for more than a day in a way that Zillow considered “public.”
Vargas said home sellers were free to continue using Compass’ 3PM strategy despite Zillow’s policy.
“Home sellers may still choose to list properties for sale through premarketing strategies such as 3 p.m., albeit at the cost of forgoing exposure for those listings on Zillow,” she wrote.
The lawsuit is a battle between two of the largest residential real estate companies over how for-sale listings are marketed.
Compass filed the lawsuit last summer, asking the court to block Zillow from enforcing its policy. The two companies have continued to trade barbs since then, including this week when their respective executives appeared on stage at Inman Connect New York.
Zillow said Friday that the ruling was a victory for consumers.
“Today’s ruling is a clear victory not only for Zillow, but for consumers, agents, brokers and the real estate industry at large,” a Zillow spokesperson said in a statement. “Zillow believes everyone deserves equal access to the same real estate information at the same time. Compass does the opposite: hides listings in its private vault, harming consumers and small businesses from profiting from it themselves.”
Compass CEO Robert Reffkin said the ruling was not a loss and that it would continue to fight.
“Today’s decision is not a loss, and our lawsuit continues,” Compass CEO Robert Reffkin said in a statement. “In Zillow’s internal strategy document, Zillow said Zillow ‘will penalize the agent for choosing to post its listings on alternative networks.’ Because agents are our customers, we have a duty to protect our agents from Zillow, which explicitly states that they are trying to “punish the agent.”
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