An Austin, Texas real estate technology company has filed a federal antitrust complaint against Zillow and the National Association of Realtors (NAR).
REX – incorporated as Real Estate Exchange, Inc. – was launched in 2015 and uses technology to enhance efficiency and reduce brokerage commissions.
“REX brings this lawsuit to keep the digital hubs of the real estate economy open so that consumers have the benefit of innovation and cost savings that come from competition,” attorney Michael Vaska said in the suit filed March 8. “The internet has radically altered how Americans shop for homes. For most consumers, homebuying begins on a mobile device or laptop. Consumers can search for homes by location, price, square footage, numbers of bedrooms and bathrooms, and other categories. In an instant, consumers can view images of homes that fit their preferences—and much more. The internet continues to evolve to satisfy the needs of home buyers. In addition to finding properties, home shoppers can tour properties virtually. Offers are now made online and closing documents are notarized on Zoom. Websites that aggregate homes for sale are the digital hubs of the new real estate economy.”
However, REX alleged its competitive model is threatened by the concerted action of NAR and Seattle-based Zillow, along with their multiple listing services (MLS) affiliates.
“Zillow recently joined NAR affiliated MLSs and adopted their associational rules to conceal all non-MLS listings on Zillow’s heavily trafficked websites,” Vaska added. “These listing portals are critical channels to reaching consumers. Zillow’s recently implemented website changes make non-MLS listings accessible only via a recessed, obscured, and deceptive tab that consumers do not see, and even professional real estate agents find deceiving. The result is that REX’s listings are losing significant traffic, severely impacting REX’s reputation, its ability to execute its innovative and disruptive business model and driving consumers away from REX and back into the MLS regime, ensuring higher commissions that benefit NAR’s members.
“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.”
REX is seeking an injunction to prevent the defendants from engaging in anticompetitive conduct, treble damages and reasonable attorneys’ fees for the alleged violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 and Section 1125 of the Lanham Act, 15 U.S.C. § 1125. The companies are also accused of violating the Washington Consumer Protection Act.
The case is REX – Real Estate Exchange, Inc. – v. Zillow, Inc.; Trulia, LLC and The National Association of Realtors (U.S. District Court Western District of Washington at Seattle, No. 21-cv-00312).