The battle for control over American real estate data entered a Chicago federal courtroom Wednesday, as Zillow faced off against Lise-based Midwest Real Estate Data and brokerage giant Compass in the first day of a highly anticipated preliminary injunction hearing.
The dispute stems from the MRED multiple listing service’s decision last month to pull the plug on Zillow’s feed of listings, eliminating more than 40,000 property offerings concentrated in the Chicago area from the popular online marketing platform for a couple days. Judge John J. Tharp Jr. ended the blackout, ordering MRED to restore the data feed with the caveat that Zillow could no longer block from display some Compass listings that had previously been privately marketed in channels outside Zillow’s reach.
Zillow is trying to stop the proliferation of these private offerings through its Listing Access Standards, which block listings previously placed on Private Listing Networks like the one MRED operates from later showing up on Zillow.
Zillow’s CFO Jeremy Hofmann made clear from the stand how his firm is extremely reliant on maintaining its access to MLS listing feeds like MRED’s.
“Listings are the lifeblood of our business,” Hofmann said.
However, MRED has decided that Zillow’s standards violate the MLS’s “objective criteria” for how brokerages are allowed to filter out listings from their platforms, arguing that Zillow is in violation of MLS rules for discriminating by the identity of a broker or agent to make its determinations on what properties for sale to show its users.
During opening statements, Zillow attorney Bonnie Lau argued that Compass and MRED are colluding to keep the housing market “behind a velvet rope,” actively harming consumers and independent brokerages. MRED’s counsel, Stephen D. Libowsky, fired back, accusing Zillow of playing “hardball” and attempting to weaponize MLS data to protect its bottom line.
“Zillow thinks it knows best how everyone should buy and sell a home,” Libowsky told the court. “They need listings and will do anything to keep them.”
Zillow executive Errol Samuelson took the stand first. He highlighted the catalyst for MRED’s May 20 decision to cut off the portal giant’s listing feed to about 43,000 home offerings concentrated in the Chicago area: Zillow’s refusal to display nine out-of-state Compass listings that had previously been marketed privately, out of sight from Zillow users.
Scoring a point for Zillow’s argument that these listings were just a pretext to spark a blackout of all MRED listings, Samuelson revealed a discrepancy. One of the contested Florida listings had its price updated on its local MLS, but Compass never bothered to update the price in MRED’s system — suggesting the listing was dumped into MRED solely to force a confrontation.
But Compass’s legal team punched back during a tense cross-examination, pressing Samuelson on why Zillow penalizes off-market properties….
Read More: Zillow vs. MRED and Compass Day 1 Antitrust Hearing Recap
