The real estate search portal asked a federal judge on Monday to stop MRED from cutting the feed that sends listings in Chicago to Zillow.
Zillow would either have to ditch what it says are pro-consumer rules nationwide or risk losing its source of listings in Chicagoland unless a federal judge agrees to intervene, the company said in a new filing in its lawsuit against Compass and the MLS serving Chicago.
Zillow asked for a preliminary injunction in a new filing in U.S. District Court in Northern Illinois on Monday, saying that it was likely to win its lawsuit filed last week against MRED and Compass, that it would be harmed if the judge didn’t intervene, and that consumers would also be harmed.
“Absent an injunction, Zillow will be forced to jettison its pro-transparency practices and aid competitors against its will, or else lose the essential listings necessary to compete, all of which would degrade Zillow’s services and irreparably harm Zillow’s platform, business, goodwill, and reputation,” the company said in the new filing.
At stake in the lawsuit is whether Zillow can maintain its Listing Access Standards, a set of rules created and enforced starting last year that sought to stop the spread of private listing networks.
Compass has sought to work around those rules in an effort to provide what it says are more options for sellers looking to market their homes without restrictive rules from the MLSs or portals like Zillow.
The debate has engulfed the industry, as MLSs have rushed to update their rules around coming-soon listings. Four major MLSs — including MRED — have struck agreements to expand nationwide, change their rules and receive a direct listing feed from the brands that make up Compass International Holdings.
Zillow said that its recently launched Zillow Preview option to display some pre-marketed listings is a competitor to private listing networks created by both Compass and MRED.
The company directly named MRED CEO Rebecca Jensen and Compass CEO Robert Reffkin as conspirators in the alleged illegal conduct.
“To insulate Defendants from that competitive threat, MRED’s CEO Rebecca Jensen and Compass’s CEO Robert Reffkin have worked in lockstep — both in secret and in public — to leverage MRED’s monopoly power and control over Chicagoland listing feeds to force competitors like Zillow to display unwanted private listings, abandon pro-consumer listings policies, and to block nascent competing offerings that preference access over exclusivity,” Zillow wrote in the new filing.
Now that MRED has members nationwide, the MLS is threatening to cut off Zillow’s direct feed of listings if the portal continues to block pre-marketed listings that violate its Listing Access Standards.
The company still looks to strike backup listing agreements directly with brokerages in the event that its MLS feed gets disrupted or shut off. Compass told Zillow on May 8 that it had terminated its direct listing feed to Zillow for all of its brands. (Zillow wrote in its new filing that Compass has over a third of the Chicago market share.)
In its initial complaint, Zillow said that MRED had demanded a response by May 19, suggesting that Zillow is on the verge of losing its MLS data feed in the nation’s third-largest real estate market unless the judge rules in its favor and issues a preliminary injunction.
Without a favorable ruling from the judge, Zillow said, it faces “an impossible decision” between abandoning its Listing Access Standards and allowing listings that started in private listing networks to “free-ride on Zillow’s platform,” or to lose its access to MRED listings.
“Either choice causes imminent and irreparable harm to Zillow,” the company wrote.
Losing its source of listings in Chicago, Zillow wrote, “would reduce viewership and impair products that depend on broad sharing of listings, eroding consumer trust in Zillow’s platform and causing an immense but indeterminate amount of lost business.”
Abandoning its standards would also be detrimental, the company argued.
“If deprived of that strategy to maintain the quality and quantity of its listings while this case proceeds, Zillow would face a negative spiral in which the loss of listings leads to lower traffic, making its platform less liquid and attractive overall, thus affecting its entire business in ways that are impossible to quantify,” it wrote.
