Zillow Lawsuit: REX Alleges Unfair Changes to Listings
In March 2021, REX filed a lawsuit against Zillow, claiming that changes to the website unfairly hid certain listings, reducing their exposure and limiting competition among real estate brokers.
Two months earlier, Zillow started moving homes not listed on the MLS to a separate tab in user search results, following an optional NAR rule that prohibits mixing MLS and non-MLS listings.
Although Zillow expressed disagreement with the rule, it had to adopt it to receive IDX feeds from MLSs that had already done so, leading to the two-tab design for MLS and non-MLS listings.
In May 2022, REX ceased its brokerage operations, and over a year later, all parties involved filed motions for summary judgment on different aspects of the lawsuit.
Judge Thomas Zilly dismissed REX’s antitrust claims 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 most charges, prompting REX to file a motion for a new trial, citing the exclusion of testimony on agent commissions.
A Seattle jury later found that REX did not prove false advertising by Zillow in separating non-MLS listings, and that Zillow acted fairly in its decisions.
REX appealed the ruling in February 2024, challenging the court’s decision on the no-commingling rule and website redesign.
The appeals court ruled that the rule was optional and not evidence of anti-competitive behavior, and that Zillow made independent decisions to comply with it.
REX’s claims of a conspiracy between Zillow and individual MLSs were not substantiated, as the focus was on the NAR/MLS regime in general.
A NAR spokesperson emphasized that the no-commingling rule was not an antitrust violation, as it was optional and not universally adopted by MLSs.
Both Zillow and REX declined to comment on the matter when contacted by HousingWire.