Austin-based real estate startup Real Estate Exchange (REX) filed an antitrust lawsuit Tuesday in federal court in Seattle against Zillow Group, accusing Zillow of anticompetitive behavior related to how certain homes are shown on its platform. The National Association of Realtors (NAR) is also listed as a defendant in the suit.
REX alleges that Seattle-based Zillow conceals REX agent listings following a recent change to Zillow’s search portal. As part of its move to buy and sell homes directly via Zillow Offers — the company is now hiring agents — Zillow joined the NAR and began sourcing homes from multiple listing services (MLS) databases. NAR is also listed as a defendant in the suit.
Due to MLS rules, listings on Zillow are now grouped under two tabs: “agent listings,” and “other listings,” which lists homes not included in MLS databases. REX describes it as a “recessed, obscured, and deceptive tab that consumers do not see.”
REX says the change has hurt its traffic and impacted its reputation.
“If the NAR and its MLS partners, which now include Zillow, are allowed to once again close off transparent access to home inventory by entering into agreements among themselves that disadvantage all but their own membership, consumers and competition will suffer,” the lawsuit reads.
Founded in 2015, REX aims to disrupt the traditional brokerage model by charging sellers lower commissions. It uses sites such as Zillow to market homes, and recently launched in the Seattle area.
REX CEO Jack Ryan said in a statement: “We believe this litigation will define whether technology will serve and protect Big Brokers and the NAR cartel or whether it will make good on its promise of greater ease, service, transparency and lower commission fees for consumers.”
Here’s a full statement from Zillow:
“We are aware of the lawsuit and believe the claims are without merit and intend to vigorously defend ourselves against it.
“Zillow is committed to providing consumers with the most complete, up-to-date housing and listing information possible on a single platform. As part of our switch to MLS Internet Data Exchange (IDX) feeds and becoming formal MLS participants earlier this year, we were required to make changes to the way some listings appear on the site in order to comply with MLS rules. As a result, when using one of our platforms to search for homes, buyers may see two options to view their search results – “Agent listings” and “Other listings” – which include For Sale by Owner listings or Coming Soon listings not on the MLS or, for that matter, on most other real estate sites.
“As part of our efforts to empower consumers, we have been actively working to update the industry rules, including those around ‘co-mingling,’ to allow a seamless search experience so we can continue to display all types of listings on our platform.”
Zillow subsidiary Trulia is also named in the suit, which you can read below.
