NEW YORK, Feb 6 - A federal judge in Manhattan on Friday declined to grant Compass's motion for an injunction that would have required Zillow to expand the number of homes it publishes on its online real estate platforms.
Compass, which is the largest residential real estate brokerage in the U.S., had argued in court that Zillow, the dominant online real estate portal, was violating antitrust law by refusing to list homes that brokers had previously marketed privately. The brokerage also alleged that Zillow had conspired with Redfin to keep certain homes off Compass's listings on the portal.
U.S. District Judge Jeannette Vargas issued a 50-page decision rejecting the injunction request. In her opinion, the judge found that Compass failed to provide direct evidence showing an anticompetitive agreement between Zillow and Redfin. The decision further states that Compass did not make the "clear showing" necessary to establish that Zillow holds a monopoly over online home listings, even if the company's market share were as high as 66 percent.
The ruling leaves in place the status quo for how listings are displayed on Zillow's platforms, and it denies the immediate court-ordered remedy Compass had sought to change those display practices. The court's analysis turned on the absence of direct proof of collusion and on the legal standard required to demonstrate monopolization.
Market participants in residential brokerage and online listing services will be watching how the litigation proceeds given the court's detailed findings. For Compass, the decision means the injunction it requested will not alter Zillow's listing conduct while the broader litigation continues. For Zillow, the decision represents a legal victory at the preliminary injunction stage in which the court declined to force operational changes.
Context and immediate effect
The judge's ruling is based on the evidentiary showing presented at the injunction stage, where a party seeking an extraordinary remedy must prove both the likelihood of success on the merits and the need for immediate relief. Here, the court concluded that the record did not contain direct evidence of an agreement between the two online brokers and that the showing required to demonstrate monopolization was insufficient even under an asserted 66 percent market share figure.
Because the injunction was denied, Zillow is not compelled by this order to alter which homes it lists on its platforms pending further litigation or settlement.
The litigation touches on competition within online real estate portals and the business practices of brokerages that rely on those platforms to market properties, and the court's findings will inform how stakeholders in those sectors assess legal and commercial risks going forward.