The news: Seattle-based Zillow Group responded to an antitrust lawsuit by Austin-based real estate startup Real Estate Exchange alleging anti-competitive behavior related to Zillow’s display of certain homes on its platform. In an opposition motion, Zillow claims that REX’s claims are selfish and that his motion “fails at every level and should be rejected”.
Background: REX was founded in 2015 and aims to disrupt the traditional brokerage model by charging sellers lower commissions. It uses sites like Zillow to market homes and was recently launched in the Seattle area.
In its lawsuit, REX alleges that Zillow is hiding REX agent lists following a recent change to Zillow’s search portal. As part of his move to buy and sell homes directly through Zillow listings, Zillow joined the National Association of Realtors (NAR), also listed as a defendant in the lawsuit along with Zillow subsidiary Trulia, and began making homes Procure Services (MLS) databases from multiple lists.
Due to MLS rules, entries in Zillow are now grouped under two tabs: Agent Entries and Other Entries, which list properties that are not in MLS databases. REX describes it as “an in-depth, covert, and misleading tab that consumers don’t see”.
According to REX, the change has impacted traffic and hurt the company’s reputation.
“If the NAR and its MLS partners, which now includes Zillow, are allowed to close transparent access to home inventory again by making agreements between themselves that penalize everyone but their own membership, consumers and competition will suffer,” it said in REX’s lawsuit.
ZIllow’s answer: According to Zillow, the move to a two-tab display for its online platforms was made in order to comply with MLS rules and get high quality listings without harming REX. It denies antitrust allegations and calls REX a “vertical supplier” in the data aggregation business for real estate advertisements. The company also says REX has no evidence of a violation of the Washington Consumer Protection Act, and that REX’s delay in filing its lawsuit “seriously undermines REX’s claims of irreparable harm”.
“The facts and the motivation behind this lawsuit are simple: REX is unhappy with Zillow’s independent decision to get faster, more reliable and better data for consumers from Zillow,” says Zillow in its filing.
Zillow is asking the court to deny REX’s motion for an injunction.
Zillow’s official statement: “Following our submission, we believe that REX’s claims are unfounded. As an MLS participant, we are obliged to adhere to the MLS rules and regulations. We always advocate rules that benefit consumers and the industry as a whole and drive innovation for everyone. “- Zillow spokesman
We asked REX for a comment and will update this story if we hear anything. Update: Here is a statement from REX: “Zillow and NAR cannot further limit consumer choice. Zillow essentially acknowledges that outdated, anti-competitive NAR and MLS rules are bad for consumers, but chose to close their ranks and enforce them anyway. Our reply letter will be available on May 10th and we look forward to continuing to fight for consumers and drive technological innovation and affordability. “
Here is Zillow’s full opposition filing: