On Friday, Zillow Group and ShowingTime filed a lawsuit in U.S. District Court in Arizona against Arizona Regional MLS and Wisconsin-based Metro MLS. The lawsuit also names MLS Aligned, the parent company of showing platform Aligned Showings.
Zillow Group acquired ShowingTime in 2021.
The complaint alleges that the defendants are “unlawfully attempting to monopolize the market for real estate showing management services in the geographic regions they control and from unlawfully conspiring to exclude or severely limit ShowingTime, their competitor in those markets.”
Zillow Group and ShowingTime said they have filed this lawsuit in an effort to restore a level “playing field” and “to be given a fair opportunity to compete.”
The plaintiffs claim that the MLSs have a monopoly on real estate services in their respective regions, as agents must belong to their local MLS in order to “successfully compete.”
“By controlling the member portals that agents use to access the essential MLS Services, the MLS Defendants control how listing agents can list a home and what ancillary services are integrated into the member portal and made convenient and effective for agents to use,” the complaint states.
The plaintiffs state that ShowingTime’s showing management platform has been offered by the MLSs as a service for members “for years.” However, in 2021, the MLS defendants and other MLSs joined together to create MLS Aligned, which acquired another showing management platform which was rebranded as Aligned Showings.
According to the complaint, the Aligned Showings platform was initially launched as an option alongside ShowingTime, but the defendants allegedly “conspired to use various tactics to steer their members to Aligned Showings, including by making Aligned Showings the default showing service, positioning Aligned Showings as a means of moving away from a competing product (ShowingTime) affiliated with Zillow (which some MLSs and agents view as a threat to their traditional business model), falsely disparaging ShowingTime in their instructional videos and materials, and warning agents that ShowingTime would eventually be taken away.”
Despite these warnings, the plaintiffs state that many agents declined to switch as Aligned Showings is “an inferior product.”
As a result, the plaintiffs claim that the defendants used “anticompetitive and exclusionary conduct” and “conspired to create a monopoly in their regions for their own showing management platform.” As of Dec. 30, 2023, ARMLS is no longer supporting the integration for the ShowingTime platform. ShowingTime said it was informed of this decision on Oct. 2, 2023. Metro MLS will also end its ShowingTime integration in Feb. 2024.
According to the complaint, this leaves Aligned Showings as the only choice available to agents on those MLS portals.
“By making Aligned Showings the only integrated option on the MLS member portal, the MLS Defendants are substantially foreclosing ShowingTime from their markets and giving Aligned Showings a monopoly over showing management platforms in their respective regions,” the complaint states. “If Defendants are allowed to continue with their anticompetitive scheme, ShowingTime will be substantially foreclosed from these regional markets, and home buyers, sellers, and their agents in that region will suffer.”
Zillow and ShowingTime are seeking injunctive relief putting an end to the defendants’ alleged anticompetitive behavior, damages and a jury trial.
This is just the latest lawsuit alleging anticompetitive behavior in the real estate industry. Earlier this year, a Missouri jury rocked the real estate industry when it found the industry liable for colluding to artificially inflate real estate agent commissions. Since the Oct. 31 verdict, at least 11 copycat commission lawsuits have been filed across the country.
The defendants did not return a request for comment.