Zillow Denies Monopoly, Collusion Claims from Compass

Zillow claims that Compass’ concerns over its listing standards and practices creating an alleged monopoly are overblown.

The listings platform filed a new brief this week in response to a recent filing from Compass supporting its efforts to halt Zillow’s listing policy, which bans listings from appearing on its website that are publicly marketed for more than 24 hours without being uploaded to Zillow and the MLS.

The briefs are part of a lawsuit filed by Compass this summer claiming Zillow has engaged in anticompetitive behavior in an effort to prevent homes from being marketed off its platform.

In this latest filing, Zillow argued that Compass has been talking out of both sides of its mouth. In court, the brokerage has claimed that Zillow’s listing standards will cause irreparable harm; to the public and its investors, however, the company continues to boast its three-phased marketing strategy proceeding as intended.

Zillow cited Compass’ strong recent financial results and its lack of investor disclosures around potential risks posed by Zillow’s policy as evidence that Compass does not face an existential threat to its business.

“Compass cannot have it both ways: either the Standards will cause irreparable harm that it has not disclosed to investors or counterparties, or, more likely, there will be no such harm,” the brief states.

Instead, Zillow argues that it implemented its standards to protect the platform from being populated by brokerages’ old listings.

“Zillow does not want to have its platform stock ‘stale bread’ while [private listing networks] hoard fresh inventory,” the complaint states.

No monopoly here

One of Compass’ more recent arguments has centered around data published by Zillow showing that 90 percent of agents notified of a noncompliant listing by Zillow do not receive a second notice. Compass has claimed that this is evidence of Zillow’s monopoly power.

Zillow paints a different picture, claiming that the data is consistent with agents “deciding that private marketing is inferior to public marketing.”

“[I]t doesn’t take a monopolist to dampen enthusiasm for 3PM; it just takes a home search platform whose audience is more valuable than whatever marginal benefits 3PM offers,” Zillow’s brief states.

Zillow also claimed that rather than dampening competition, its listing standards promote it by giving potential competitors access to more listings. The company cited Homes.com’s share of audience traffic increasing from 3 percent to 19 percent in four years.

“Zillow has not sought exclusivity, but the opposite; Zillow has insisted that listings must be shared with everyone to be displayed on Zillow,” the brief states.

Zillow also again refuted Compass’ claim that it colluded with Redfin. Compass has claimed that Redfin and Zillow conspired to introduce replicate listing policies, alleging that Redfin CEO Glenn Kelman called Compass CEO Robert Reffkin to inform him of Redfin’s plans the same day that Zillow’s policy was announced.

In its brief, Zillow denied this chain of events. Instead, it claimed that it only informed Kelman of its plans the day before its policy went public, and that Kelman independently deliberated on a response before announcing a similar policy on April 14.

Zillow also points to testimony from Kelman, where he denies telling Reffkin that he made an agreement with Zillow or that Zillow would compensate Compass for complying with its standards, allegations Compass made in its initial complaint.

Zillow added that Compass’ witnesses have not provided testimony of that interaction, and that Reffkin “claimed to remember little and demurred to his declaration when asked to detail the meeting” with Kelman.

A hearing on the preliminary injunction is set for later this month.