Introduction to the Lawsuit

Real estate brokerage company Compass has filed a lawsuit against Zillow over its policy to ban private home listings. In a filing with the U.S. District Court for the Southern District of New York, Compass claims that “Zillow has sought to rely on anticompetitive tactics to protect its monopoly and revenues in violation of the antitrust laws.”

By MICHELLE CHAPMAN, Associated Press

The Alleged Anticompetitive Policy

Compass says that Zillow has implemented an exclusionary policy that says if a home seller and their real estate agent market their property off Zillow for more than one day, that Zillow and its allies, Redfin and eXp Realty, will ban that home from being listed on their search platforms. “The Zillow Ban seeks to ensure that all home listings in this country are steered on to its dominant search platform so Zillow can monetize each home listing and protect its monopoly,” Compass said in the lawsuit.

Impact on Competition and Homeowners

Compass alleges that the ‘Zillow Ban’ was enacted to prevent rivals from competing against it and reduces homeowner choice. “In a free and competitive market, competitors’ products and strategies should rise and fall on merit—not the whims of a monopolist gatekeeper like Zillow,” Compass said. This policy could have significant implications for the real estate market, potentially limiting options for homeowners and reducing competition among real estate agents.

Request for Injunction and Damages

Compass wants an injunction that would prohibit Zillow from implementing and enforcing its ‘Zillow Ban’ and implementing and enforcing similar policies. The company also wants a trial by jury and an unspecified amount in damages. A Zillow spokesperson said in a statement on Monday that the company believes the claims in the lawsuit are unfounded and that it will vigorously defend against them.

Response from Zillow

“Our focus remains on creating a level playing field that serves the best interests of everyone in the home buying and selling journey,” the spokesperson said. This response suggests that Zillow views its policy as a way to maintain a fair and competitive market, rather than an attempt to stifle competition.

Current State of the Housing Market

The housing market is always competitive, but has become more fierce of late. Last month the National Association of Realtors reported that sales of previously occupied U.S. homes fell in April, as elevated mortgage rates and rising prices discouraged prospective homebuyers during what’s traditionally the busiest time of the year for the housing market. Existing home sales dropped 0.5% in April, from March, to a seasonally adjusted annual rate of 4 million units, according to the National Association of Realtors.

Sales Trends

Sales of existing homes barely moved in May, with existing home sales up 0.8% last month from April to a seasonally adjusted annual rate of 4.03 million units, the National Association of Realtors said Monday. Stubbornly high mortgage rates and rising prices made homebuying less affordable even as the inventory of properties on the market continued to increase. There’s also been the issue of more sellers than homebuyers, with potential buyers skittish over high prices and mortgage rates.

Buyer and Seller Dynamics

As of April, the U.S. housing market had nearly 34% more sellers than buyers shopping for a home, according to an analysis by Redfin. Aside from April 2020, when the pandemic brought the economy and home sales activity to a standstill, there haven’t been this few buyers in the market for a home before, based on records that date back to 2013.

Conclusion

The lawsuit filed by Compass against Zillow highlights the competitive nature of the real estate market and the challenges faced by homeowners and real estate agents. The outcome of this lawsuit could have significant implications for the industry, potentially affecting how homes are listed and sold. As the housing market continues to evolve, it is essential to ensure that policies and practices support fair competition and serve the best interests of all parties involved.

FAQs

• Q: What is the basis of the lawsuit filed by Compass against Zillow?
  A: The lawsuit alleges that Zillow’s policy to ban private home listings is anticompetitive and violates antitrust laws.
• Q: How does Zillow’s policy affect homeowners and real estate agents?
  A: The policy potentially reduces homeowner choice and prevents rivals from competing against Zillow, limiting options for real estate agents.
• Q: What is the current state of the housing market?
  A: The market is highly competitive, with elevated mortgage rates and rising prices discouraging prospective homebuyers, leading to a decrease in sales of previously occupied homes.
• Q: What are the implications of the lawsuit for the real estate industry?
  A: The outcome could affect how homes are listed and sold, potentially leading to changes in policies and practices to ensure fair competition.
  Originally Published: June 23, 2025 at 12:30 PM EDT