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Compass filed the lawsuit last summer asking the court to stop Zillow from enforcing its Listing Access Standards, which sought to halt an anticipated surge in publicly marketed private listings.
A judge on Friday denied Compass’ request to stop Zillow from enforcing its ban on listings that are marketed publicly but aren’t shared on the multiple listing service and available to the portal within a day.
Compass, the judge said, had not showing a likelihood to win the case.
The ruling was on Compass’ request for a preliminary injunction on the policy and is not considered a final judgment.
But the order undercut several arguments made by Compass that were key to the case, including that Zillow colluded with Redfin in announcing a similar policy or that Zillow was a monopoly in the marketplace.
“Because Plaintiff has not shown a likelihood of success on the merits, Plaintiff’s motion for a preliminary injunction is denied,” Judge Jeannette Vargas wrote in her ruling. Compass is the plaintiff in the case.
At the center of the case is Compass’ 3-Phased Marketing Strategy (3PM), which starts a listing in a private status that is off the MLS and available through a Compass agent. If left unsold, the listing then moves into a Coming Soon listing before eventually ending on the MLS.
Zillow’s policy was an effort to stamp out a rise in such private listing networks, which were growing in popularity early last year before the portal announced its plan to ban a listing for the life of the listing if it was marketed for more than a day in a way that Zillow deemed public.
Vargas said that homesellers were free to continue to use Compass’ 3PM strategy despite the Zillow policy.
“Indeed, home sellers can still choose to list properties for sale through premarketing strategies like 3PM albeit at the cost of foregoing exposure for those listings on Zillow,” she wrote.
The lawsuit is a battle between two of the largest companies in residential real estate over how for-sale listings are marketed.
Compass filed the lawsuit last summer asking the court to stop Zillow from enforcing its policy, which sought to curtail an anticipated surge in listings that were marketed between brokerages but not entered into an MLS and available to Zillow and other search portals.
Zillow said the ruling was a win for consumers.
“Today’s ruling is a clear victory not just for Zillow, but for consumers, agents, brokerages and the real estate industry at large,” a Zillow spokesperson said in a statement. “Zillow believes everyone deserves equal access to the same real estate information at the same time. Compass does the opposite — hiding listings away in its private vault, harming consumers and small businesses to benefit itself.”
Compass CEO Robert Reffkin said that the ruling wasn’t a loss, and that it would continue to fight.
“Today’s decision is not a loss, and our lawsuit continues forward,” Compass CEO Robert Reffkin said in a statement. “In Zillow’s internal strategy document, Zillow said Zillow will ‘punish the agent for choosing to put their listings on alternative networks.’ With agents being our clients, we have an obligation to protect our agents from Zillow, which explicitly stated they are trying to ‘punish the agent.’”
The ruling was on a request for a preliminary injunction on the policy and is not considered a final judgment. But the judge said that she denied the initial request because Compass had not shown a likelihood to win the case.
This is a breaking news story and will be updated.
