Zillow fired a new salvo Wednesday night in its legal battle with Compass, saying in a sprawling brief that its private listing policy should be allowed to stand.
The new brief is part of the two companies’ legal battle over Zillow’s Listing Access Standards. Those standards — which went into effect in June — ban listings from Zillow if they are publicly marketed but not submitted to the local multiple listing service and made available to the portal. Compass sued Zillow over the rule in June.
Compass has also asked the court for an injunction that would block the rule from going into effect.
In Wednesday’s brief, Zillow lays out a number of different arguments. Among other things, Zillow argues that blocking the rule would force the court to become an “industry regulator and to compel Zillow to display on its platform, for free, Compass listings that contradict Zillow’s core principle of transparency in real estate information.”
Zillow also argues that “Compass’s injunction risks serious harm to consumers and to Zillow.” Other arguments include that Zillow does not believe it has a monopoly over the home search business, that it did not conspire with Redfin on private listing policies, that it has a right to determine what appears on its platform, and that its Listing Access Standards favor both consumers and competition.
“Compass’s injunction risks serious harm to consumers and to Zillow,” the brief states. “Home sellers will be harmed by a fragmented market that reduces exposure for their listings, and buyers will be harmed when it is more difficult and more expensive to find listings hidden away by brokerages like Compass. Zillow will be harmed by being forced to carry advertisements that undermine its mission, underwrite a competitor’s business strategy, and support an anti-consumer business model that degrades Zillow’s platform and impairs its ability to compete on the merits.”
Asked for comment on Zillow’s brief, Compass pointed Inman to its own filing in the case from late October. That filing stated that Zillow has threatened “to punish agents” in an effort to get them to do the portal’s “dirty work.” The company also said in an email that “if competition and the free market agreed with Zillow, Zillow would not need the Zillow Ban at all.”
In a statement, a Zillow spokesperson said that “while Americans are struggling to access and afford housing, Compass wants to hide available listings from the public.”
“Hidden listings harm consumers, agents and smaller brokerages; Zillow’s standards protect against that harm,” the statement added. “The Compass hidden listings scheme benefits only Compass; Zillow’s standards benefit the entire marketplace. Sellers deserve the widest possible audience, and buyers shouldn’t have to wonder what homes they’re not seeing. Real estate works when it’s fair, equal, open and transparent, so Zillow is defending that transparency — and we’re not backing down.”
Other arguments mentioned in the brief include that Compass has misrepresented Zillow’s rule, and that the rule doesn’t hurt Compass’ business or reputation.
The filing is the latest in an ongoing back-and-forth between the companies. Zillow first responded to an injunction request in July, arguing that Compass was engaged in a “hidden listing scheme.”
Compass filed a response last month criticizing Zillow’s alleged powers of “intimidation.”
Now, the new brief offers Zillow’s latest arguments in advance of a hearing next week during which the court will consider the injunction request.
Wednesday’s brief is also the latest in a series of notably pugnacious comments from Zillow as it faces down multiple lawsuits. In a legal filing last week, for example, Zillow slammed CoStar for using a “playbook of deploying copyright lawsuits to attack its competitors.” CoStar, which owns residential portal Homes.com, sued Zillow in July for what it claims is copyright infringement.
Days before knocking CoStar, Zillow also criticized a Chicago-area multiple listing service known as Midwest Real Estate Data (MRED). Via a statement, Zillow described MRED’s private listing network as a “hidden listing scheme” — language that it also deployed in its legal struggle with Compass.
Update: This story was updated after publication with Compass’ response.
