Judge Says Zillow’s Listing Policy Can Proceed For Now

Compass has been dealt an early setback in its lawsuit against Zillow.

A federal judge denied the brokerage’s request for a preliminary injunction, allowing Zillow to continue enforcing its listing policy at the center of the dispute while the case proceeds. The case has served as a referendum on the brewing battle over how listings are marketed in the industry.

Across four days of hearings, Compass argued that Zillow violated the Sherman Antitrust Act both by colluding with Redfin in its rollout of its listing policy and by exerting its monopoly power to stifle competition.

Compass failed to show “any direct evidence of an anticompetitive agreement between Zillow and Redfin,” Judge Jeannette Vargas wrote in her decision.

Compass had also claimed that Zillow had asserted its monopoly power in the home search market in an effort to eliminate competition, which Vargas dismissed.

She found that Zillow did not have the power to exclude competition from the home search market, noting in the decision that “there is no evidence that any brokerage stopped offering such strategies to consumers after Zillow announced its [Listing Access Standards].”

Zillow in a statement called the decision a “clear victory” for the firm, “but [also] for consumers, agents, brokerages and the real estate industry at large.”

“Zillow believes everyone deserves equal access to the same real estate information at the same time,” the firm said in a statement. “Compass does the opposite — hiding listings away in its private vault, harming consumers and small businesses to benefit itself.”

“Today’s decision is not a loss, and our lawsuit continues forward,” Compass CEO Robert Reffkin said in a statement. “In Zillow’s internal strategy document, Zillow said Zillow will ‘punish the agent for choosing to put their listings on alternative networks.’ With agents being our clients, we have an obligation to protect our agents from Zillow, which explicitly stated they are trying to ‘punish the agent.”

Compass sued Zillow in June, claiming it had engaged in anticompetitive tactics and collusion when it launched its new listing policy, which threatened bans for listings that were marketed off the MLS and Zillow.

Compass followed up by seeking a court-ordered preliminary injunction in an effort to block Zillow’s policy while the two sides martialed their full arguments for a trial later this year.

After swapping a series of court filings over the summer, Compass and Zillow met in court for the first time in November. Executives from both companies submitted to cross-examination and each side presented troves of internal documents.

The hearings detailed how both sides view the listing policy as critical to both their long-term business strategies and the future of the industry. Multiple Compass executives testified that they went all-in on their three-phase marketing concept, while Zillow lawyers and executives readily admitted their concerns over off-market listings.