Lawsuit Concludes: Compass Withdraws Suit Against Zillow

Property brokerage Compass has ended its lawsuit against Zillow, concluding a legal disagreement regarding the marketing of home listings online.

Background of the Dispute

For several years, Compass encouraged real estate agents to utilize “coming soon” or pre-market listings. These listings advertise homes privately or on limited platforms before they appear on broader sites like Zillow or Redfin.

Critics argued that this approach could obscure the actual duration a home has been on sale and limit its visibility to potential buyers. Brokerages, however, contended that it offers sellers increased control over their marketing strategy. Zillow, for its part, consistently maintained that such listings fragmented information and reduced transparency for buyers.

The Lawsuit Initiated

Compass initiated its lawsuit against Zillow last June, challenging a new Zillow rule. This rule mandated that any home marketed to the public must appear on Zillow within one day of its initial listing, or it would not be allowed on the platform at all.

Compass asserted that Zillow’s rule was anticompetitive and specifically intended to hinder competition in the online home search sector.

Last month, a New York federal judge declined to issue a block on Zillow’s rules at Compass’s request, indicating that Compass had not demonstrated a high likelihood of winning its antitrust claims.

Recent Developments and Resolution

Three weeks after the judge’s decision, Compass announced a significant collaboration with Redfin, a key competitor to Zillow. This agreement allows Redfin to exclusively display Compass’s “coming soon” listings, which were previously only available on the Compass site.

Crucially, one day before Compass withdrew its case, Zillow amended its listing rules. The company will no longer prohibit listings advertised on “a public-facing website, mobile app, or internet real estate portal.” This pivotal change now permits Compass’s listings on Redfin to be displayed on Zillow.

Additionally, Zillow introduced “Zillow Preview,” a new feature designed to make pre-market home listings from selected partner brokerages, including Keller Williams and REMAX, exclusively available on its platform.

Company Statements

Compass commented on Zillow’s rule modifications, stating: “The end of the ‘Zillow Ban’ is a major victory for homesellers and their real estate professionals. With homesellers and their real estate professionals no longer subject to punishment by Zillow for publicly marketing a home, Compass will voluntarily dismiss its lawsuit.”

Zillow acknowledged Compass’s decision to withdraw its lawsuit, adding that it believed Compass’s claims “lacked merit, and the court’s preliminary injunction ruling reinforced that view.” A Zillow spokesperson further stated: “The underlying issue remains: Private listing networks are not in the best interests of consumers, and they never have been. Restricting listings to hidden networks limits transparency, disadvantages buyers and sellers and undermines fair access to real estate information which is so critical in this housing affordability crisis.”