Compass Sues Zillow Over Its Private-Listings Ban

After months of tussling over private-listings networks, the battle between Compass, the brokerage that has championed exclusive, in-house listings, and Zillow, the largest listings network in the country, has turned into all-out war. Compass has sued Zillow, the parent company of StreetEasy, the New York Times reported, accusing the listings database of attempting, through its private-listings ban, to maintain a monopoly over digital home listings — which are used by virtually all buyers shopping for a home at this point. “No one company should have the power to ban agents or listings simply because they don’t follow that company’s business model,” Compass founder and chief executive Robert Reffkin, told the Times. “That’s not competition. It’s coercion.”

The move comes after months of increasingly aggressive maneuvers by Zillow to stop Compass from promoting and expanding its private-listings network, which it began to do in earnest last November. As the brokerage that does the most deals in the country, its listings are considerable; as of this spring, Compass’ private-listings network included some 7,500 homes. In April, Zillow responded by banning any listing that was not posted on its site within 24 hours. (The ban was for the length of the contract, meaning if it was listed with a different broker in the future, it could be posted on Zillow.) It was a significant blow: Any listing that was marketed via in-house listings networks, email blasts, or on Instagram for more than a day before debuting on Zillow would miss out on the platform altogether. After Zillow began its ban, Redfin followed suit. In May, Zillow went even further, blocking agents with private listings from using StreetEasy’s specialty tools.

Zillow, whose business model is built around being a comprehensive listings database, has good reason to oppose the turn toward private-listings networks, which it claims are also bad for buyers, who can make better decisions when information isn’t hidden from them. Brown Harris Stevens, one of the few brokerages that has stood firm against exclusive listings networks, has argued that sellers benefit from an open marketplace, too, with data showing that they get higher prices when listings are publicly marketed and seen by the largest group of potential buyers.

But Compass has claimed there are clear benefits to listing first on its in-house network: Buyers can test pricing, reduce days “on the market,” and potentially avoid public exposure for those who are averse to publicity and might not want their bedroom décor visible to the general public. (For many ultrawealthy and celebrity buyers, truly private listings, known as whisper or pocket listings, that are not advertised anywhere publicly, have long been an option.) It also benefits Compass, of course, which, due to its scale, can win clients over with the promise that they’ll be missing out if they go with another brokerage. It also allows the company to collect on both sides of a deal if a listing sells in-house. The lawsuit is a shift from the company’s initial reaction to the ban; a spokesperson previously told us the company believed its private-listings network wouldn’t be affected. After a monthslong standoff between the two industry giants, the outcome of the court case may determine, at least temporarily, whose practices really qualify as exclusionary.