A federal judge has denied Compass’s request for a preliminary injunction that would have forced Zillow to lift its ban on certain listings. United States District Judge Jeannette Vargas ruled on February 6th that Compass failed to provide sufficient evidence of Zillow holding a monopoly or that consumers are deterred from using other platforms.
Key Takeaways
- Judge Jeannette Vargas denied Compass’s motion for a preliminary injunction against Zillow.
- The ruling stated that Zillow’s market share and brand recognition do not prevent consumers from cross-shopping.
- Compass’s antitrust lawsuit against Zillow will proceed to trial.
The Legal Battle Unfolds
Compass had sought a court order to prevent Zillow from enforcing its private-listing ban, implemented last May. The brokerage argued that Zillow’s policies violate antitrust laws. However, Judge Vargas found that even if Zillow holds a significant market share, Compass did not demonstrate a monopoly that would warrant such an immediate and restrictive court order.
In her opinion, Vargas noted, "Given that consumers use multiple online home search platforms simultaneously at little or no cost, Zillow’s brand recognition and related network effect do not appear to have deterred prospective home buyers from cross-shopping amongst competitors or new entrants."
Zillow’s Victory and Industry Impact
A Zillow spokesperson hailed the ruling as a "clear victory" for the real estate industry, consumers, and agents. The company emphasized its belief in "equal access to the same real estate information at the same time," contrasting it with Compass’s alleged practice of "hiding listings away in its private vault."
Zillow’s statement further asserted that Compass’s lawsuit was an attempt to "force Zillow to participate in that exclusionary scheme" and reduce transparency. The company believes that hiding listings exacerbates the current housing affordability crisis.
Compass’s Stance and Future Proceedings
Despite the setback, Compass chairman and CEO Robert Reffkin stated that the lawsuit "continues forward." He reiterated Compass’s commitment to protecting its agents, referencing an internal Zillow document that allegedly mentioned a "punishment list" for agents who do not comply with Zillow’s listing policies. Compass claims its "private exclusive" model delays listings on the broader MLS in favor of its own network, which Zillow’s policies reportedly penalize.
Compass clarified that the lawsuit is not about private exclusives but about Zillow’s demand that publicly marketed listings be available on all listing services. An upcoming trial will determine the merits of Compass’s antitrust claims.