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Zillow tries to swat away REX anti-trust lawsuit

Listings giant says discount brokerage has fabricated "a massive industry-wide conspiracy"

Zillow filed court papers Friday to dismiss an anti-trust lawsuit from REX on how it displays home-listings, litigation that challenges Zillow’s recent transformation as a company.

The filing – in which Zillow opposes an injunction sought by REX – states that REX is months late in filing the lawsuit, points out that REX is actually an advertiser and supplier of information to Zillow, and says REX is trying to create a bogeyman by repeatedly invoking Zillow’s closer work with the powerful National Association of Realtors trade group.

“Rather than adapting to Zillow’s changes, REX has fabricated a massive industry-wide conspiracy, claiming that Zillow has ‘locked arms’ with NAR to inflate broker agent commissions,” reads the opposition paper, filed in Washington federal court in Seattle.

REX replied to the legal filing in a company statement Monday.

“Zillow and NAR can’t continue to stifle consumer choice,” the statement read. “Zillow essentially concedes that NAR and MLS’s antiquated, anticompetitive rules are bad for consumers, but chose to close ranks and enforce them anyway.”

The federal judge presiding over the case in Seattle, Thomas Zilly, set a date for May 10 for a hearing on the matter.

An Austin, Texas-based residential brokerage, REX filed a lawsuit in March, complaining its listings were unfairly relegated to the “other listings” tab instead of the “agent listings” tab on Zillow’s consumer-facing website, which draws billions of interested buyers and window shoppers each year.

When a visitor to Zillow, for example, searches listings in Chicago’s Uptown neighborhood there were 184 homes for sale, as of Monday, in the “agent listings” tab, and 11 in the “other listings” tab – including multiple listings by REX agents.

REX has argued that this “other” is pejorative and an attempt by NAR member brokerages to increase an anti-competitive stranglehold on home sales.

All parties to the lawsuit agree this agent/other bifurcation stems from Zillow radically changing how it aggregates listing data.

Late last year, the Rich Barton-led firm began entering into contracts with Multiple Listings Services – most of which are owned by NAR local chapters – and receiving those MLS’s Internet data display, or IDX feeds.

The change coincided with the Seattle listings giant becoming an NAR member residential brokerage, and it ended its years-long practice of culling listing data from a varied array of sources.

REX does not participate in local MLSs, relying instead on consumer-facing websites, including Zillow, to get the word out about its listings.

In fact, REX supplies Zillow with listing information, the court filing pointed out. And it pays the company so its agents get website billing as “Zillow Premier Agents.”

NAR is a co-defendant in the lawsuit. The trade group responded with a message that read in part, “The MLS system puts consumers first by enabling equitable access for buyers, sellers and small business brokerages to the most comprehensive and accurate information about homes for sale.”

“REX,” the statement read, “Cannot contort antitrust laws to shift responsibility for its own failure to gain traction in the marketplace.”

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