A U.S. District Court judge denied motions by the National Association of Realtors (NAR) and Zillow to dismiss an antitrust challenge from the real-estate tech company Real Estate Exchange (REX), saying that REX provided sufficient evidence that NAR and Zillow conspired to restrain trade and to harm consumers.
REX sued on the grounds that a NAR segregation rule— a rule followed by Zillow that separates new technology listings on its site from traditional broker listings in a different tab, titled “Other Listings”– violates antitrust and consumer protection laws. They argued the policy privileges traditional broker models that include 5-6% commission fees for buyers. REX said the “Other Listings” tab was a “recessed, obscured, and deceptive tab that consumers do not see.”
“REX is the only real estate industry player willing to fight for consumers in courts of law and public opinion against the cartel that is driving up residential real estate fees, making home ownership so expensive, and making the home buying and selling process difficult and obscure,” said REX CEO Jack Ryan.
“The broker bosses do not want consumers to choose homes or the price they pay for themselves. REX does. Today’s order is an important first step toward reining in the anti-consumer policies that have come to define big real estate and big tech. The ruling points to the long overdue changes that only REX delivers to home shoppers nationwide.”
The order from a Seattle district court allows the case to move forward. “Because the complaint also alleges that Zillow went a step further—e.g., by affirmatively redesigning its websites to enforce an allegedly misleading labeling system—Plaintiff has plausibly alleged that Zillow agreed to use the MLS rules to restrain trade.”
In its opposition filing in May, Zillow claimed the choice to use different tabs stemmed from MLS rules and clarity of listings. “The facts and motivation behind this lawsuit are simple: REX is unhappy with Zillow’s independent decision to obtain faster, more reliable, and better data for Zillow’s consumer.”