Zillow vs. Compass: A Battle Over Digital Home Listings

Strategic Insights -

The real estate industry is bracing itself for a significant showdown between Zillow, the country's largest real estate site, and Compass, the real estate brokerage that sells more houses than any of its competitors in the United States. Compass has sued Zillow in New York federal court, accusing the website of gatekeeping home listings and breaking federal antitrust laws. At the heart of the dispute is a 24-hour rule implemented by Zillow, which requires any home that is put on the market to be available for listing on the website within 24 hours of advertising it. Compass claims that this rule is an anticompetitive conspiracy to maintain a monopoly over digital home listings.

Key Takeaways:

  • Compass claims that Zillow has conspired to maintain a monopoly over digital home listings, violating federal antitrust laws.
  • Zillow's 24-hour rule requires any home that is put on the market to be available for listing on the website within 24 hours of advertising it, effectively banning "pocket listings" or "whisper listings".
  • Compass has been promoting its "Compass Private Exclusives", a marketing channel of about 7,000 home listings available only to Compass agents and the buyers working with them.
  • Redfin, another online brokerage, has also implemented a similar listing ban, though it is not a defendant in the lawsuit.
  • N.A.R. (National Association of Realtors) softened its policy to allow for delayed marketing in March, but Zillow stood firm on its 24-hour rule.
  • Compass describes Zillow as a direct competitor and claims that N.A.R.'s policy around privately-marketed listings was "supported by Zillow and other competitors of Compass" and "targeted at Compass's early innovative efforts."
  • Robert Reffkin, Compass's founder and chief executive, stated that his brokerage's lawsuit is about "protecting consumer choice" and "no one company should have the power to ban agents or listings simply because they don't follow that company's business model."

Statistics:

  • Zillow has 227 million unique visitors a month.
  • Redfin has about 50 million unique visitors per month.
  • Compass has around 7,000 home listings available only to Compass agents and the buyers working with them, through its "Compass Private Exclusives" marketing channel.
  • There are hundreds of MLS (multiple listing services) databases around the country, responsible for managing real estate listings.

Sources:

  • The New York Times
  • N.A.R. (National Association of Realtors)
  • Compass
  • Zillow
  • Redfin