Compass CEO asks judge to stop Zillow’s listing ban 

Compass has filed a motion in its antitrust suit against Zillow, asking the court to grant a preliminary injunction against the home search giant to prevent it from enforcing its listing ban during the course of litigation.

In April, Zillow unveiled new Listing Access Standards (LAS) — which bar publicly marketed listings that are not widely available from appearing on its site — announcing that enforcement would begin on June 30. The standards would effectively block Compass listings that are pre-marketed but not on the MLS.

Compass lawyers Crowell & Moring LLP also filed a request for expedited discovery which could create a roadmap of how each side pursues the case.

'Irreversible' damage to the brokerage: In a declaration filed on June 27 in a U.S. District Court in New York, Compass CEO Robert Reffkin claims that Zillow's enforcement of its listing standards will "cause irreparable damage to Compass and home sellers and home buyers, stifling innovation and restricting choice," adding that this damage — and goodwill among Compass' agents and clients — would be "irreversible." 

Investor confidence has also taken a hit, Reffkin stated, as the uncertain impacts of the listing standards have caused "investors to doubt the soundness of their investment and the future growth of the company."

"Compass will lose business opportunities because of the Zillow LAS," Reffkin wrote in the declaration.

Competitors are already taking advantage: In his statement, Reffkin shared anecdotal evidence in support of his claims, though he did not provide any specifics. "I have already heard from Compass agents that competing agents are using the uncertainty surrounding the Zillow LAS to tell sellers that if they list with a Compass agent their listing could be banned from Zillow," Reffkin wrote. 

"I also have heard that competing brokerages are using the Zillow LAS as a tactic to recruit our agents to join their firm instead. At least one Compass region lost its top performing team of agents because the team was fearful that the Zillow LAS would negatively impact their business if they stayed with Compass."

A conspiracy among Compass rivals? The filing includes Reffkin's accounts of conversations with top industry leaders like Redfin CEO Glenn Kelman — who has endorsed Zillow's approach, and whose brokerage also plans to ban pre-marketed listings — and Zillow executives including CEO Jeremy Wacksman, COO Jun Choo and CFO Jeremy Hofmann. 

Reffkin claims that Zillow conspired to harm Compass by putting pressure on consumers: 

"When I asked how Zillow planned to prevent home sellers from choosing to market off Zillow, Mr. Hoffman [sic] said that Zillow was 'making the bet' that they could force home sellers to fall in line when they are 'forced to choose' between using Zillow or pre-marketing strategies like Compass's 3-Phased Marketing Strategy," he wrote in the declaration, adding that another Zillow exec told Reffkin he would have to decide whether Compass would be "a partner of Zillow or not."

Reffkin also claims that Kelman offered a quid pro quo should Compass comply with Zillow's new listing rules.

"Mr. Kelman then pushed me to listen to Zillow, telling me that it is 'not good when Zillow and Compass are warring,'" Reffkin wrote, adding: "Mr. Kelman also suggested that Zillow would make it up to Compass financially if Compass were to change or slow its pre-marketing strategies or follow the policies."

What Zillow said: A Zillow spokesperson redirected Real Estate News to their comment made on June 23 when the suit was filed. Zillow has long argued and maintained that private listings lead to a number of risks to individual consumers and to the market as a whole — particularly if there is a domino effect among top brokerages who follow Compass' lead in using inventory competitively instead of cooperatively. 

"Hiding listings creates a fragmented market, limits consumer choice and creates barriers to homeownership, which is bad for buyers, sellers, and the industry at large, especially in this inventory and affordability-constrained environment," the Zillow spokesperson said over email. 

"Our listing access standards are designed to ensure transparency, equal opportunity, and broad visibility for everyone so sellers can maximize price and time to sell and so buyers have access to all available inventory."