Judge Denies Compass Injunction Against Zillow Listing Policy

A New York City-based U.S. District Court judge has denied Compass’s preliminary injunction motion in its antitrust lawsuit against Zillow. 

As a result of Judge Jeannette Vargas’ ruling, Zillow may continue enforcing its listing access standard policy, which bans listings from its site that have been publicly advertised for more than one business day prior to being available for display on a site powered by an IDX or VOW data feed. 

Originally filed in mid-June, the lawsuit focuses on Zillow’s listing access standards policy, which went into effect in late June. Compass filed its motion for preliminary injunction just days before the policy was set to take effect. 

“Today’s decision is not a loss, and our lawsuit continues forward. 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’,” Robert Reffkin, Compass International Holdings’s chairman and CEO, said in a statement.

In an emailed statement, a Zillow spokesperson called the ruling a “clear victory” for Zillow, 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. Compass does the opposite — hiding listings away in its private vault, harming consumers and small businesses to benefit itself,” the spokesperson wrote. “Compass filed this baseless lawsuit in an attempt to force Zillow to participate in that exclusionary scheme — but today, the United States District Court for the Southern District of New York rejected their effort to reduce transparency for consumers, ruling that Compass failed to show a likelihood of success on the merits. At a time when Americans are struggling to afford a home amid a major housing shortage, hiding listings in private networks only deepens the crisis. While Compass keeps consumers in the dark, Zillow turns on the lights to help people get home.” 

In denying Compass’s motion, Judge Vargas wrote that “Compass has not shown a likelihood of success on the merits,” of the case it presented during the hearing.

Due to this, the judge felt that it was unnecessary to reach the question of the policy causing Compass irreparable harm. During the hearing, an expert witness for Compass testified that Zillow’s policy harms competition because it suppresses competing platforms, which Compass claims Compass.com is.

Other witnesses for Compass testified that Zillow’s policy had resulted in a decline in both engagement and users on its platform, and that the enforcement of the policy has resulted in a lower percentage of sellers who are willing to use Compass’s three-phased marketing plan, which the firm maintains harms its overall revenue and performance. 

However, under questioning by Zillow, Soham Bohnsle, Compass’s head of investor relations, confirmed that Compass had no concrete evidence tying the three-phased marketing strategy to changes in revenue and that despite Compass’s claims that the policy was causing irreparable harm,  no analyst had issued a “sell” rating on Compass stock. Bohnsle also confirmed that Compass has continued to post annual revenue gains since the policy was announced.

While the ruling is only related to Compass’s preliminary injunction motion, antitrust experts told HousingWire that the ruling does offer a peek into how the judge is viewing this lawsuit. By denying the motion, the judge may still be leaning toward Compass, but did not think the plaintiff met the burden of showing that it is likely to prevail at trial.

Zillow did not immediately return HousingWire’s request for comment.