MRED Warns Zillow Lawsuit Risks MLS Antitrust Precedents

Midwest Real Estate Data (MRED), a Chicagoland multiple listing service, has issued a warning that its ongoing legal dispute with Zillow regarding listing display rules could potentially undermine established federal antitrust principles that govern multiple listing services (MLS) and broker cooperation. This concern was articulated in a blog post published on Thursday, where MRED drew a parallel between the current legal fight and a 2008 settlement between the Department of Justice and the National Association of Realtors (NAR). That earlier settlement addressed MLS rules perceived as disadvantageous to Internet-based brokerages. The core tenet established by the 2008 settlement mandates that MLSs and brokers must maintain consistent treatment of competing business models, ensuring that MLS cooperation does not unfairly favor one competitor over another. In practical terms, this principle has historically prevented brokerages from excluding listings belonging to rival brokerages from the listing feeds displayed on their own websites. The terms of this specific settlement concluded in November 2018.

MRED's lawsuit, initiated by Zillow in mid-May, asserts that Zillow's listing access standards policy contravenes the spirit of the 2008 settlement. MRED contends that when enforced, this policy leads to the exclusion of certain listings from display on Zillow's platform, based on criteria that MRED argues conflict with its Internet Data Exchange (IDX) data licensing agreement. The central issue in the litigation revolves around MRED's right to suspend its IDX and VOW listing data feeds to Zillow, should the listing portal engage in filtering or suppressing specific listings. The lawsuit also names Compass International Holdings as a defendant, alleging that it unlawfully pressured MRED to take such action.

MRED's argument posits that allowing Zillow to selectively filter listings while still benefiting from an MLS feed would establish a precedent. This precedent, MRED fears, could empower any brokerage to curate competitors' listings or manipulate listing visibility to align with their own marketing objectives. Such a scenario, according to MRED, would erode the comprehensive and cooperative marketplace that consumers and real estate agents have come to expect from MLS-powered property search experiences. The organization emphasizes that the integrity of the MLS system relies on the open sharing of data among participants, fostering a competitive yet collaborative environment. The potential for selective filtering by dominant platforms like Zillow could lead to a fragmented and less transparent market, ultimately disadvantaging consumers by limiting their access to complete property information and potentially inflating prices due to reduced competition. The lawsuit seeks to clarify the boundaries of data access and manipulation within the real estate industry, particularly in the context of evolving digital platforms and their interaction with traditional MLS structures.