Zillow has filed an antitrust lawsuit against Midwest Real Estate Data and Compass following an April agreement in which Compass said it would share its nationwide listings through MRED’s private listing network as part of an expanded MLS partnership.
The complaint, which was filed in federal court in Chicago on May 12, outlines how MRED and Compass worked together to “threaten Zillow’s Chicagoland listing data feed,” according to Zillow.
Zillow claims the arrangement allows Compass agents across the country to enter listings into MRED in a way that extends leverage beyond Chicago and forces “competitors nationwide to abandon consumer protections.”
The complaint also alleges that in early May, MRED demanded Zillow reinstate Compass’ private listings from outside of its territory and threatened to terminate Zillow’s access if it did not comply.
Matt Kreamer, a communications director with Zillow, said that Compass reportedly holds 23% of MRED’s board seats and controls 35% of sales in the Chicago market. He said that Zillow believes MRED used that influence to “reshape its own rules” in ways that would benefit Compass at the expense of everyone else.
As part of the agreement, Compass agreed to subsidize part of the cost for the first 100,000 Compass agents who join MRED as full members, a move that Zillow claims could triple MRED’s size and “dramatically expand its power to impose its rules on the rest of the industry.” In return, Zillow argues that MRED agreed to use its control over Chicago-area listing data to pressure any platform that adopted stricter transparency rules.
Zillow says the lawsuit is based on alleged violations of the Sherman Antitrust Act.
Zillow Chief Industry Officer Errol Samuelson provided the following statement to Chicago Agent:
“Fundamentally this lawsuit is about consumers and competition and fairness in the real estate industry. The MLS in Chicagoland, which is meant to be a marketplace where all the brokers share their listings for the benefit of their sellers and their buyers, instead decided to work with the area’s largest broker and skew the rules to actually hurt consumers and hurt competition.
What MRED has done with this Compass scheme is use its monopoly power to undermine what makes MLS so great: the fair, level playing field. What’s more, they are threatening to cut off buyers and sellers’ access to Chicago listings on Zillow, to protect Compass listings in places like Florida, California and Georgia. It’s egregious.”
MRED did not immediately respond to a request for comment.
This is a developing story.