CoStar Hammers Zillow in the Court of Public Opinion

In July, CoStar Group sued Zillow over allegedly stealing its photos, claiming “mass infringement.”

Almost two months later, CoStar is claiming nothing has changed. In a press release this week, the data giant is doubling down on its claims, saying Zillow has displayed at least 4,600 additional CoStar-owned images and has continued to display almost 8,000 images that CoStar previously identified in its lawsuit.

The extrajudicial press release is part of what has become a common two-pronged playbook from CoStar, which involves aggressively pursuing legal action against its competitors while vociferously defending its actions in the court of public opinion.

Given Zillow has yet to respond to CoStar’s complaint and the court has yet to issue a preliminary injunction, the company has not been legally required to remove allegedly copyrighted material from its website.

Zillow, in the day before CoStar refreshed its claims in the press release, filed a motion requesting the case be transferred from New York to the state of Washington, pointing to CoStar’s litigious history.

“This case is CoStar’s latest attempt to weaponize copyright litigation for competitive pressure, consistent with its history of filing suits against industry rivals,” Zillow’s attorney Jamie Levitt wrote. “This lawsuit is nothing more than a calculated attempt to misuse copyright law to sideline Zillow and lock in CoStar’s control.”

CoStar’s tactics have proven fruitful in the past. In 2016, CoStar sued its largest competitor at the time, Xceligent, claiming it had stolen and repurposed thousands of images. The next year, Xceligent filed for bankruptcy and in 2019, CoStar obtained a $500 million judgment against its bankruptcy estate.

CoStar is currently suing another commercial competitor, Crexi, which it claims deliberately copied and cropped watermarked photographs using offshore agents.

In its case against Zillow, CoStar, which owns and operates listing sites like Homes.com and Apartments.com, claimed that Zillow had used more than 46,000 CoStar Group images on its listing website.

Earlier this month, Zillow confirmed that it had begun removing photos involved in the lawsuit from its website. In its lawsuit, CoStar claimed that most of the photos at issue were appearing on Zillow’s multi-family listings, alleging that Zillow used watermarked photos to populate unclaimed property pages and active listings, and that it then syndicated those listings to platforms like Redfin and Realtor.com.

CoStar included quotes from its general counsel Gene Boxer and its CEO Andy Florance, who have been public voices for the firm seeking to condemn alleged missteps by its competitor.

“Zillow used our watermarked images, it profited, and—stunningly—it has kept doing it. Rather than learn its lesson, it doubled down, and the infringement scheme got even larger,” Boxer said in a statement.

Zillow has been on defense in recent months. Last week, the company was sued by homebuyers claiming its Flex program funnels buyers to agents who pay the company up to 40 percent of their commission, something that is allegedly never disclosed to consumers.

The platform is also being sued by Compass over its listing standards policy, which requires listings to be uploaded to Zillow and the MLS within 24 hours of being publicly marketed or risk being banned from Zillow.

Florance, who has already issued a number of statements criticizing Zillow’s business model, stated that Zillow’s alleged copyright infringement and the newest lawsuit targeting its Flex model “exposes an ongoing pattern of morally questionable behavior.”

Zillow, which has generally saved its remarks for court documents, hinted at some of its arguments in its case transfer request. It said that it has an established policy allowing copyright owners to request the removal of allegedly copyrighted materials, but that “CoStar chose to shift the burden to the courts and file the instant suit without prior notice to Zillow.”

It added that it will be seeking a pre-motion conference on a motion to dismiss.