Jonathan Stempel
2 min read
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By Jonathan Stempel
NEW YORK (Reuters) -Compass, the largest U.S. residential real estate brokerage by sales volume, sued Zillow on Monday, accusing the nation's largest online real estate portal of violating federal antitrust law by conspiring to restrict private home listings.
In a complaint filed in Manhattan federal court, Compass said Zillow employs an "exclusionary" policy where if sellers and their agents market homes off Zillow for more than one day, Zillow and its brokerage "allies" Redfin and eXp Realty will ban those homes from their platforms.
Compass said the "Zillow ban" is designed to steer all U.S. home listings to Zillow's platform, and ensure that the company can maintain a monopoly while boosting profit.
"Zillow's ambitions are clear: it wants to use its monopoly power in home search to own every facet of the home selling and buying process," thereby "crushing competition" in the home search market, according to the complaint.
Compass, based in Manhattan, is seeking an injunction against the Zillow ban, compensatory damages, and triple damages for Zillow's alleged willful misconduct. Redfin and eXp were not named as defendants.
Zillow did not immediately respond to requests for comment. The Seattle-based company said it has about 160 million homes in its database, receives 227 million unique visitors a month, and received 2.4 billion visits between January and March.
Leo Pareja, eXp's chief executive, said in a statement that eXp developed its strategies in response to market conditions, and "any implication of co-conspiracy is categorically false."
Redfin did not immediately respond to a request for comment.
Compass sued as rising prices and elevated mortgage rates deter some prospective homebuyers, causing the pace of home sales to stagnate.
While the National Association of Realtors on Monday said U.S. sales of existing homes rose 0.8% in May from April to a seasonally adjusted 4.03 million unit annual rate, May's sales pace was the slowest for that month since 2009.
The inventory of existing homes, meanwhile, rose 6% to 1.54 million units in May. Supply increased 20% from a year earlier.
Compass said Zillow is undermining its strategy of first releasing some listings to agents and buyers as Private Exclusives, and then posting the listings to its public search platform in a "Coming Soon" phase.
Zillow plans on June 30 to start blocking listings that are publicly marketed for more than one day before appearing in a public listing database, known as a multiple listing service.
