Property brokerage Compass on Wednesday dropped its lawsuit against Zillow, ending a legal clash over how home listings can be marketed online.
For the past few years, Compass — now the largest real estate brokerage in the world — has encouraged agents to use “coming soon” listings as part of its three-phase marketing strategy. “Coming soon” or pre-market listings show homes advertised privately or on limited platforms before appearing more widely on home listing sites like Zillow or Redfin.
Critics say “coming soon” or “pre-market” listings can obscure how long a home has truly been on sale and limit who sees it, while brokerages argue it gives sellers more control over how their homes are marketed. Zillow has argued that the approach fragments listing information and reduces transparency for buyers.
Compass sued Zillow last June over a new rule requiring that any home marketed to the public must appear on Zillow within one day of its listing or it would not be allowed on the platform at all.
Compass, which referred to the rule as the “Zillow ban” in its lawsuit, claimed the rule was anticompetitive and designed to crush competition in the home search space.
Last month, a New York federal judge refused to block Zillow’s rules at Compass’s request, saying Compass did not show it was likely to win its antitrust claims.
Three weeks after the judge’s ruling, Compass announced a partnership with Redfin, a Zillow competitor. The agreement would allow Redfin to display Compass’s “coming soon” listings exclusively; previously, those listings were only available on the Compass site.
Zillow amended its listing rules this week, one day before Compass dropped its case in court. It will no longer ban listings that are advertised on a “public-facing website, mobile app, or internet real estate portal,” meaning Compass’s listings on Redfin are now permissible.
On Monday, Zillow also announced “Zillow Preview,” a new feature that will make pre-market home listings from select partner brokerages, such as Keller Williams and REMAX, available exclusively on its site.
In a statement, Compass applauded the changes to Zillow’s rules.
“The end of the ‘Zillow Ban’ is a major victory for homesellers and their real estate professionals,” the company said. “With homesellers and their real estate professionals no longer subject to punishment by Zillow for publicly marketing a home, Compass will voluntarily dismiss its lawsuit.”
Zillow said it “welcomes” Compass’s decision to withdraw its lawsuit but added that it believed Compass’s claims “lacked merit, and the court’s preliminary injunction ruling reinforced that view.”
“The underlying issue remains: Private listing networks are not in the best interests of consumers, and they never have been,” a Zillow spokesperson said in a statement.
“Restricting listings to hidden networks limits transparency, disadvantages buyers and sellers and undermines fair access to real estate information which is so critical in this housing affordability crisis,” the spokesperson added.
