A real estate startup company is suing Zillow within a federal court over allegations that the website is violating antitrust laws by “deceptively steering customers to home listings from a subset of agents.”
The suit was filed in a US federal court in Seattle in which the startup Rex alleges that Zillow and its affiliate Trulia are illegally favoring certain listings by brokers who belong to the National Association of Realtors (NAR); the most prominent US real estate trade association. The startup has claimed that non-NAR real estate agents are now located in a “hidden tab” on the website.
Rex’s general council Mike Toth was recently interviewed to discuss the suit regarding one of the nation’s most popular real estate listing websites. “The change by Zillow and Trulia forces all non-NAR listings to have permanent low visibility. This is the real estate web returning to this old vision of data segregation rather than data democratization for consumers.”
The suit could potentially shift the way in which certain online real estate platforms operate and allow more opportunities to arise for more buyers and sellers to negotiate the type of agent they want. Zillow and Trulia account for 75% of the online home search market in America, and when they made changes to their sites in the beginning of January, listings began being segregated to hidden areas of the site.
“Zillow and Trulia started segregating listings, giving preferential treatment to the 1.3 million real estate agents who belong to NAR. Other listings, including those posted by brokers not affiliated with NAR, foreclosures and homes listed for sale by owners without agents, are now relegated to a separate tab. We are asking the court to block Zillow and Trulia from segregating listings,” Rex claimed.
NAR has their own real estate listing site, Realtor.com, which is the second-most viewed site for agents throughout the nation. That platform is known for only showing listings by NAR’s agents, and understandably so considering it’s their own website. So the issue now is that the changes Zillow and Trulia made means that three out of the four most popular real estate listing sites are favored for NAR’s agents and their listings exclusively.
Those listings in particular tend to be more expensive because they require the seller to pay a commission, often 6% of the homes sale price, which is split between the agents of the buyer and seller. Rex has now raised these antitrust concerns with the Justice Department and 35 state attorney generals.
Viet Shelton is a spokesperson for Zillow who claims the company “made the change in January after it became a participant in the Multiple Listing Services Internet Data Exchange feeds, which are operated by NAR. Zillow’s rules for the IDX feeds require participants to segregate listings. Zillow is committed to giving consumers the most up-to-date housing information on the most amount of listings possible on a single platform. We made changes to the way some listings appear on the site in order to be compliant with MLS rules.” The suit will likely begin unfolding within the next month or so.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at email@example.com.