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Compass Sues Zillow Over Alleged Anticompetitive Practices

Strategic Insights

— 1 min read

Compass, a major real estate brokerage firm, has filed a lawsuit against Zillow, accusing the popular real estate website of enforcing an exclusionary policy that hinders rivals from competing against it. This policy, known as the "Zillow Ban," restricts home listings from being advertised on Zillow's platform if they have been marketed elsewhere for more than a day. Compass claims that this tactic is aimed at preserving Zillow's monopoly and revenues in violation of antitrust laws. The lawsuit also alleges that the policy reduces homeowner choice and stifles competition in the real estate market.

Key Takeaways:

  • Compass claims that Zillow's exclusionary policy, known as the "Zillow Ban," violates antitrust laws and stymies competition in the real estate market.
  • The policy prohibits home listings from being advertised on Zillow's platform if they have been marketed elsewhere for more than a day.
  • Compass argues that this tactic is intended to preserve Zillow's monopoly and revenues, reducing homeowner choice and limiting rival brokerages from competing effectively.
  • The lawsuit seeks an injunction to prohibit Zillow from enforcing its "Zillow Ban" policy and also requests damages.
  • Compass offers sellers the option to list properties on their own website, avoiding the public listing on Zillow and other major search sites.
  • According to the National Association of Realtors, existing home sales declined 0.5% in April, reaching the slowest sales pace for the month since 2009.
  • As of April, the U.S. housing market had nearly 34% more sellers than buyers shopping for a home, according to an analysis by Redfin.

Statistics:

  • 34% more sellers than buyers shopping for a home in the U.S. housing market as of April 2022, according to Redfin analysis.
  • 4 million units: existing home sales in April 2022, representing a 0.5% decrease from March, according to the National Association of Realtors.
  • 0.8% increase in existing home sales in May 2022 compared to April, reaching a seasonally adjusted annual rate of 4.03 million units, according to the National Association of Realtors.

Sources:

  • The Associated Press
  • Compass filing with the U.S. District Court for the Southern District of New York
  • National Association of Realtors' report on existing home sales
  • Redfin analysis on the U.S. housing market

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