The news: Seattle-based Zillow Group responded to an antitrust lawsuit filed by Austin-based real estate startup Real Estate Exchange in March that accused Zillow of anticompetitive behavior related to how certain homes are shown on its platform. In an opposition motion, Zillow alleges that REX’s claims are self-serving and that its motion “fails at every level and should be denied.”
Background: Founded in 2015, REX aims to disrupt the traditional brokerage model by charging sellers lower commissions. It uses sites such as Zillow to market homes, and recently launched in the Seattle area.
In its lawsuit, REX alleges that Zillow conceals REX agent listings following a recent change to Zillow’s search portal. As part of its move to buy and sell homes directly via Zillow Offers, Zillow joined The National Association of Realtors (NAR) — which is also listed as a defendant in the suit, along with Zillow subsidiary Trulia — and began sourcing homes from multiple listing services (MLS) databases.
Due to MLS rules, listings on Zillow are now grouped under two tabs: “agent listings,” and “other listings,” which lists homes not included in MLS databases. REX describes it as a “recessed, obscured, and deceptive tab that consumers do not see.”
REX says the change has hurt its traffic and impacted its reputation.
“If the NAR and its MLS partners, which now include Zillow, are allowed to once again close off transparent access to home inventory by entering into agreements among themselves that disadvantage all but their own membership, consumers and competition will suffer,” REX’s lawsuit reads.
ZIllow’s response: Zillow says the move to a two-tab display for its online platforms was made to comply with MLS rules and to obtain high-quality listings, not to harm REX. It denies antitrust allegations, calling REX a “vertical supplier” in the property listings data aggregation business. The company also says REX cannot prove a violation of the Washington Consumer Protection Act, and says REX’s delay in filing its lawsuit “seriously undercuts REX’s claim of irreparable harm.”
“The facts and motivation behind this lawsuit are simple: REX is unhappy with Zillow’s independent decision to obtain faster, more reliable, and better data for Zillow’s consumer,” Zillow says in its filing.
Zillow asks that the court deny REX’s request for a preliminary injunction.
Zillow’s official statement: “Per our filing, we believe REX’s claims are without merit. As MLS participants, we are required to abide by the MLS rules and regulations. We are always advocating for rules that benefit consumers, the entire industry and drive innovation for all.” — Zillow spokesperson
We’ve reached out to REX for comment and will update this story if we hear back. Update: Here’s a statement from REX: “Zillow and NAR can’t continue to stifle consumer choice. Zillow essentially concedes that NAR and MLS antiquated, anticompetitive rules are bad for consumers, but chose to close ranks and enforce them anyway. Our reply brief will be available May 10 and we look forward to continue fighting for consumers and advancing technological innovation and affordability.”
Here’s Zillow’s full opposition filing: