In March 2021, REX initiated a legal battle against Zillow, accusing the real estate giant of manipulating its website to disadvantage certain property listings and stifle competition among brokers. The lawsuit set off a series of events that unfolded over the span of two years, leading to a courtroom showdown that ultimately favored Zillow.
- Website Design Changes:
- Zillow made adjustments to its platform in early 2021, segregating homes not listed on the Multiple Listing Service (MLS) into a separate tab. This move aligned with an optional rule set by the National Association of Realtors (NAR), aimed at preventing the mixing of MLS and non-MLS listings.
- Despite objecting to the NAR rule, Zillow claimed it had no choice but to comply in order to access MLS data from participating entities. This shift resulted in the creation of two distinct sections on the website for MLS properties and other listings.
- Legal Proceedings:
- REX ceased its brokerage operations in May 2022, setting the stage for legal action against Zillow and NAR.
- Judge Thomas Zilly presided over the ensuing lawsuit, dismissing REX’s antitrust claims but allowing false advertising and deceptive trade practices allegations to proceed under specific legal statutes.
- In a trial held in September 2023, Zillow emerged victorious on the remaining charges brought forth by REX, prompting a motion for a new trial by the aggrieved party.
- Judicial Response:
- Following REX’s appeal in February 2024, the appeals court ruled in favor of Zillow, highlighting the lack of evidence supporting collusive practices between Zillow and NAR.
- The court emphasized that the NAR rule permitting the segregation of MLS listings was optional, with Zillow independently deciding to implement the changes to conform with the guideline.
- Claims of a conspiracy involving Zillow and individual MLSs were debunked due to a lack of substantial evidence and clarity in REX’s arguments.
In conclusion, the legal dispute between REX and Zillow shed light on the intricacies of real estate industry regulations and corporate practices. The court’s ruling underscored the importance of substantive evidence in antitrust cases and highlighted the significance of transparency and compliance within the realm of online property listings. As the industry continues to evolve, stakeholders are reminded of the need for adherence to established guidelines while fostering healthy competition and innovation.
