The way Americans find and buy homes is at the centre of a high-stakes legal battle between two real estate giants. On Friday, a federal judge stated that Zillow’s private listings ban can stay enforced while the legal battle between the online real-estate marketplace and Compass, America’s largest residential real estate brokerage, continues.
Figure 1: Court lets Zillow keep its private-listing ban amid legal battle with Compass.
This gave Zillow a win in the first round of the case, where Compass alleged that Zillow breached antitrust laws by blocking listings that agents had privately marketed for more than a day and by allegedly coordinating with Redfin to exclude such properties from its site.
On February 6, U.S. District Judge Jeannette Vargas in New York rejected Compass’s request for an emergency court order that would have stopped Zillow from enforcing its listing rules while the broader legal battle continues. Compass had originally filed the request on June 27.
Judge Vargas said Compass failed to demonstrate that Zillow had engaged in unlawful coordination with rival Redfin or that it held monopoly power over the online home-search market. These two major elements were required to justify an injunction. “Today’s ruling is a clear victory not just for Zillow, but for consumers, agents, brokerages and the real estate industry at large,” one of Zillow’s representatives mentioned after Zillow’s preliminary win.
On the other hand, Robert Reffkin, Chief Executive Officer of Compass, mentioned, “Today’s decision is not a loss, and our lawsuit continues forward. In Zillow’s internal strategy document, Zillow said Zillow will ‘punish the agent for choosing to put their listings on alternative networks.”
What’s at stake
At the centre of the dispute is Zillow’s policy banning listings that were privately marketed for more than one business day before being publicly posted through MLS feeds. Homes that violate this rule are permanently barred from appearing on Zillow’s platform.
Zillow’s database includes around 165 million homes. Its website drew about 250 million unique visitors per month during last year’s third quarter.
Zillow says the policy promotes transparency, expands buyer access, and ultimately helps sellers achieve better prices by exposing properties to the widest possible audience.
Compass, however, argues the rule unfairly punishes agents who use alternative marketing strategies and pressures them to list exclusively through Zillow. The brokerage relies heavily on “private” or “pocket” listings as part of its three-phase marketing model, which gives select buyers early access before homes are broadly listed.
Judge’s reasoning
In her 50-page opinion, Vargas concluded that Compass was unlikely to succeed on the merits of its antitrust claims.
She found no clear evidence that Zillow conspired with Redfin to exclude private listings, noting that both companies appeared to be responding independently to changing industry rules and market conditions.
Even accepting Compass’s claim that Zillow controls between 50% and 66% of the online listings market, the judge said that dominance alone does not prove illegal monopoly power, especially since buyers can still access homes through other platforms at little or no cost.
Because Compass could not show immediate and irreparable harm, the court declined to halt the policy while the lawsuit proceeds.
Broader industry context
The case comes amid a larger debate over private listings and market transparency. In 2019, the National Association of Realtors introduced rules requiring listings to be widely distributed within 24 hours of marketing. Earlier this year, those rules were loosened, allowing local MLS systems more flexibility.
Shortly afterwards, Zillow announced its stricter ban on previously private listings. This move was also mirrored by Redfin.
Critics of private listings say they reduce available inventory visibility and make an already tight housing market even more opaque for buyers. Supporters, including Compass, say they give sellers more control and allow them to test pricing strategies without affecting public data such as days on market.
Also Read: Why Australia’s 50,000-Home Shortage Will Worsen Affordability
What happens next
The case will now move forward in federal court, but Zillow’s policy will remain in effect unless a higher court intervenes or Compass ultimately prevails at trial.
Legal analysts say the ruling signals that Compass faces an uphill battle in proving its antitrust claims, but the outcome could still shape the future of online real estate listings.
In afternoon trading following the decision, Zillow shares rose about 2.7%, while Compass shares gained roughly 2.4%.
