Zillow Lawsuit Update: REX’s Legal Battle
Back in March 2021, REX filed a lawsuit against Zillow, alleging that changes to Zillow’s website were unfairly hiding certain listings, reducing exposure, and impacting competition among real estate brokers.
Two months before the lawsuit was filed, Zillow started moving non-MLS listed homes to a separate tab in user search results to comply with an optional NAR rule. This rule prohibited the commingling of MLS and non-MLS listings for those who adopted it.
Although Zillow did not support this rule, it was compelled to adopt it to access IDX feeds from MLSs that had already adopted it. This led to the two-tab design for MLS and non-MLS listings on the website.
In May 2022, REX ceased its brokerage operations amidst the ongoing legal battle. Subsequently, motions for summary judgment were filed by all parties involved in the case a year later.
Judge Thomas Zilly dismissed REX’s antitrust claims against NAR and Zillow but allowed the false advertising claim under the Lanham Act and a claim for unfair trade practices under Washington’s Consumer Protection Act to proceed.
Following a trial in September 2023, the court ruled in favor of Zillow on the remaining charges. REX then filed a motion for a new trial, arguing that it was unfairly restricted from presenting testimony about agent commissions to the jury.
Ultimately, a Seattle jury found that REX did not prove Zillow used false advertising by separating non-MLS listings on the website. It also determined that Zillow successfully defended against REX’s claim of deceptive and unfair practices.
REX filed an appeal in February 2024 after its motion for a new trial was denied by Zilly. The appeals court ruled that the no-commingling rule did not constitute evidence of anti-competitive behavior and that Zillow acted independently in redesigning its website to comply with the rule.
The ruling also addressed REX’s claims of a conspiracy between Zillow and individual MLSs to enforce the rule, stating that such allegations were not clearly raised in the case.
In response to the decision, a NAR spokesperson emphasized that the no-commingling rule was optional and did not violate antitrust laws. They expressed satisfaction in putting the lawsuit behind them and focusing on delivering value to their members.
Both Zillow and REX declined to comment on the matter when approached by HousingWire.