The hearing regarding Zillow’s motion for a preliminary injunction in its ongoing antitrust battle with Midwest Real Estate Data (MRED) and Compass International Holdings may have concluded last Thursday, but the parties are still waiting for an answer. 

This week, all three parties must file post-hearing briefs by Thursday with any replies to another party’s brief due by the following Monday. But while last week’s hearing primarily focused on Zillow’s motion for a preliminary injunction that would prevent MRED from suspending its IDX and VOW listing data feeds to Zillow, the greater lawsuit rests on Zillow’s claim that MRED and Compass conspired to cut off the listing portal’s access to the Chicagoland MLS listing feed.

And it is this antitrust argument that Judge John Tharp will be examining when he rules on Zillow motion, as in order to be awarded a preliminary injunction, a plaintiff must show that it would be irreparably harmed without it and that it is likely to prevail at trial.

Zillow makes its case 

Over the course of the two-day hearing, Zillow sought to show the court that MRED and Compass had worked together to suspend Zillow’s listing feed. The listing portal argued that MRED “changed” the “objective criteria” participants are used to filter its IDX listing data to target Zillow and its listing access standards policy at the behest of Compass and that the MLS suspended Zillow’s listing feed not because of a neutral rule violation, but because Zillow’s policy threatened Compass’s business model.

Under Zillow’s policy, listings are banned from Zillow if they are not available for display on IDX or VOW feed powered websites within one business day of the property being publicly marketed, which impacts listings Compass markets as private exclusives before taking them public via the MLS, as the firm advertises the existence of these listings in a “black box” on its site.  

Zillow also argued that its policy is pro-competitive and good for consumers because it promoted transparency and provides consumers with access to all available inventory, while MRED’s enforcement of its IDX display rule resulting in the suspension of Zillow’s feed hurt consumers, reduced transparency and protects Compass from competition. 

Zillow attempted to illustrate its arguments by showing communications between Compass and MRED leaders and questioning leaders at both firms about these communications. 

MRED claims neutrality

MRED stressed that the its “objective criteria” rule is neutral and the result of the  2008 settlement between the Department of Justice (DOJ) and the National Association of Realtors (NAR), that prevented MLSs from selectively hiding listings from consumer-facing web portals and not concerted action with Compass. Under the policy, IDX participants may filter listings only using objective criteria, such as geography, price, property type and listing type. However, according to MRED’s arguments, Zillow was filtering listings based on marketing history, which is not one of the criteria allowed under the policy. 

Additionally, Rebecca Jensen, MRED’s CEO, noted in her testimony that MRED has been working toward expanding nationally since she took the helm at the MLS over a decade ago and that these aspirations did not simply come about because Compass offered a pathway toward rapid national expansion. 

Testimony also showed that in the view of the Chicagoland MLS, Zillow, not Compass, is the one attempting to dictate industry policy through its listing access standards. 

Jensen also said she was “disgusted” by Zillow’s admission in planning documents that it knew that its listing access standards policy may violate the IDX display rules of some MLSs, yet they went through with deploying the policy anyway.

Who is the anticompetitive one?

As for Compass, the Robert Reffkin-helmed firm also pushed back on Zillow’s claims that it conspired with MRED, with its attorney arguing that Compass acted unilaterally and lawfully when it complained to MRED and other MLSs about Zillow’s listing bans. During his testimony on Thursday, Reffkin said that Zillow executives repeatedly said they would not allow brokers to market listings outside Zillow and that Zillow offered Compass financial incentives if it stopped promoting off-portal marketing strategies.

He also testified that Zillow executives warned they would use “carrots and sticks” to stop marketing outside Zillow. Reffkin argued that this was anticompetitive as it sought to protect Zillow’s business model while harming others businesses. 

The brokerage defendant also argued that Zillow’s policy not only interferes with a seller’s ability to choose how they market a property, but also does not increase listing transparency, as the firm claims the policy punishes competing public marketplaces rather than hidden listings. 

The waiting game

Judge Tharp will take all of these arguments as well as those outlined in the post-hearing motions and replies all parties will file by next Monday. It is unknown how long the court will take to rule on the motion, but it may take weeks if not months for the parties to have an answer. 

In a July 2 entry on the court docket, Judge Tharp noted that both Zillow’s motion for a preliminary injunction and MRED’s motion to compel arbitration, remained under advisement.

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