The nation’s largest real estate brokerage by volume is suing Zillow, alleging the online portal is violating antitrust laws by banning listings marketed for more than a day before they go public.
In a federal lawsuit filed early Monday, Compass alleges that a new Zillow policy — labeled in the suit as “the Zillow Ban” — violates antitrust law and perpetuates Zillow’s monopolistic role in the residential real estate market.
The suit is the latest development in the debate about how properties should be marketed and listed. At the heart of the disagreement is whether agents need to list properties for sale publicly, and if so, how quickly they need to make them public.
Zillow’s policy requires that once a property is marketed, it must be made public on the Multiple Listing Service within one day. MLS platforms feed online portals like Zillow. Marketing is defined as “a sign in the yard, an Instagram post, or on a brokerage website behind the lure of exclusive inventory,” Zillow said in announcing the policy in April. At the time, Zillow said the policy benefits sellers by bringing more attention to their listings and giving buyers more options.
In its lawsuit, Compass said Zillow's policy is anticompetitive, bolstering the website's business at the expense of brokerages. “The Zillow Ban seeks to ensure that all home listings in this country are steered onto its dominant search platform so Zillow can monetize each home listing and protect its monopoly,” the lawsuit alleged.
Zillow did not immediately respond to a request to comment Monday.
The lawsuit also named brokerage eXp Realty and online brokerage Redfin as co-conspirators alongside Zillow, though neither brand was identified as a defendant.
EXp Realty CEO Leo Pareja told Homes.com that Compass is "burning cash and credibility" by filing suit. "Suing Zillow for giving consumers access? That’s not strategy, that’s desperation," Pareja said. "The recent legal filing contains claims that are without merit as they relate to eXp. eXp is not a named defendant, and any implication of co-conspiracy is categorically false. Our business strategies were developed independently in response to a rapidly evolving real estate market."
Redfin did not respond to a request for comment Monday. Homes.com does not have a policy like Zillow's.
Sellers and buyers benefit from private listings, Compass argues
Portals have become more popular tools among home shoppers and sellers, so brokerages have sought new ways to market properties. In 2024, 43% of buyers said their first step in the homebuying process was searching online, according to NAR data.
In navigating the complexities of the MLS and the rise of online portals, Compass developed its “inventory-based” approach, according to the lawsuit.
In November, the brand went “all in” when it rolled out its three-phase strategy, giving agents the opportunity to market a property just within Compass before labeling it as “coming soon” and then listing publicly on the MLS. The approach abides by NAR policy, according to Compass.
Marketing properties as exclusive and coming soon offers sellers "a chance to test list prices, experiment with marketing approaches, and gather early feedback," according to the lawsuit. "The strategy also benefits buyers by 'unlocking' inventory, allowing buyers to see homes that otherwise may not be ready for a fully public listing."
The “Zillow Ban” took effect May 28, when the portal started notifying agents if their listings violated the policy. Starting June 30, the portal plans to begin blocking listings.
At that time, “an agent’s third non-compliant listing — and any subsequent non-compliant listings — will be blocked from Zillow and Trulia for the life of the listing agreement between that listing broker and seller,” according to Zillow.
Compass, however, said that "eliminates a new and innovative business model that creates competitive differentiation in the market, and it reduces homeowner choice."
In a LinkedIn post Monday morning, Compass CEO Robert Reffkin said "some things just need to be settled in court."